Beijing should impose a real estate tax on speculative investors in order to rein in the red-hot property market, a leading government think tank said yesterday.
The Chinese Academy of Social Sciences advised the central government to gradually move away from the existing tax on property transactions as this effectively passes the burden on to the buyers in the form of higher prices.
Instead, it suggested a tax be imposed on existing residential property holdings to increase costs for speculators.
'Such a tax is good for controlling property speculation,' said Li Jingguo, a director of the land and property research bureau of the urban development and environmental research institute at the academy.
Under the plan, property owners would be taxed on the basis of the number of units they hold or the total gross floor area, according to Li.
Academics and analysts believe the suggestion is aimed at testing the market's response.
