Official says measures to cool sector may have gone too far
A pilot scheme to levy a tax on the secondary property market, tried out in several cities, will not be introduced nationwide any time soon, a senior official has said. His assurance comes amid concerns that austerity measures aimed at cooling the property market may be going too far.
Vice-Minister of Construction Liu Zhifeng said during a television interview yesterday that the pilot tax, first introduced in Hangzhou last year, had been scrapped in June, along with similar schemes in Nanjing and parts of Beijing. The only city in which the scheme still applies is Qingdao .
'The state government has not considered [extending the scheme]. The policy was tested in Hangzhou before but scrapped soon after,' he said.
The pilot scheme was first introduced in Hangzhou in January last year, when a 20 per cent tax was imposed on owners of residential properties sold within five years of purchase. Similar policies were introduced in June in other cities.
Mr Liu did not elaborate on why the pilot schemes had been scrapped and made no reference to Shanghai's March introduction of a 5.5 per cent capital gains tax for flats sold within one year of purchase, which was targeted at speculators.
Analysts have cautioned that measures to combat the overheating property market might overly suppress the development of the secondary market, which is still in its infancy.