China’s property tax causing sleepless nights for homeowners as Beijing walks the ‘tightrope’

Name: Cheap housing but few economic opportunities for young Chinese in city along Russian border
Uploaded: 2021-11-29T14:00:15.000Z
Duration: 8 min 7 s
Description: Cheap housing but few economic opportunities for young Chinese in city along Russian border

China’s property tax plan is part of Xi Jinping’s so-called common prosperity campaign to redistribute wealth and to address widening social inequality

The plan will not be implemented straight away, with a five year pilot programme set to test the proposal before it is eventually rolled out across the country

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China’s property tax plan is part of President Xi Jinping’s campaign to redistribute wealth and address widening social inequality, but some fear the rich will find a way to avoid paying their fair share. Illustration: Henry Wong

Jane CaiandHe Huifeng

Published: 10:00pm, 29 Nov 2021Updated: 9:10am, 1 Dec 2021

This is the third in a three-part series looking at the potential impact of China’s proposed property tax law.

Computer programmer Zheng Wenxuan has two flats in Beijing – one for his own family and one for his parents who moved from their hometown in the northeastern province of Heilongjiang.

The 42-year-old spends 25,000 yuan (US$3,900) a month for the combined mortgage payments – a heavy burden for the only breadwinner in the family.

And that financial burden could become heavier with China’s proposed first-of-its-kind property tax set to be piloted in several cities in the near future for five years before being rolled out nationwide.

I’ve had many sleepless nights recently. The Sword of Damocles is hanging over my head

Zheng Wenxuan

“The market values of my properties have already declined by 10 per cent since the announcement of the new policy. If we have to pay the tax for owning a second apartment, as some speculate, the annual taxation will add to my financial burden,” Zheng said.

“I’ve had many sleepless nights recently,” Zheng added. “The sword of Damocles is hanging over my head.”

In August, President Xi Jinping declared China will “actively and steadily push forward property tax legislation and reform” and carry out pilot programmes in a bid to address the widening wealth gap amid his push for common prosperity.

No details have been revealed officially, only that it will be levied on the value of residential and non-residential properties across the nation, with the exception of rural properties.

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Cheap housing but few economic opportunities for young Chinese in city along Russian border

SCMP Series

China’s property tax dilemma

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