China property

China property tax may hit Beijing, Hangzhou, Guangzhou next: Shimao

Guangzhou and Hangzhou could also be hit by the measure designed to cool surging prices

PUBLISHED : Tuesday, 18 June, 2013, 12:00am
UPDATED : Tuesday, 18 June, 2013, 4:36am

A trial property tax may next be applied to the cities of Beijing, Guangzhou and Hangzhou in Zhejiang province, according to the executive vice-chairman of Shimao Property.

"Prices in these cities have risen a lot since the beginning of the year," Jason Hui Saitan said yesterday. "In Beijing, prices have probably risen more than 10 per cent these past six months."

Hui spoke after Shanghai-based Shimao held its annual general meeting.

A property tax is an administrative measure central and local authorities use to curb price surges.

The central government could extend the trial property tax, first introduced in Shanghai and Chongqing two years ago, to more cities, the National Development and Reform Commission indicated last month.

Prices of new flats in Beijing rose 1.4 per cent month on month in April and 10.3 per cent year on year, National Bureau of Statistics figures show. In Hangzhou, new home prices increased 1.4 per cent month on month and 5.2 per cent year on year. In Guangzhou, they shot up 2.1 per cent month on month and 13.5 per cent year on year.

A total of 3,223 flats were sold in Beijing in the first 15 days of this month, up 57 per cent from the same period last month, figures on mainland property website show.

Beijing's city government is tightening rules for property projects. New non-residential and residential projects bigger than an average 140 square metres per unit must meet certain criteria before developers may apply for pre-sale permits, the capital's housing bureau said on Friday.

Following the sharp rise in home prices in mainland cities in the first half of the year, Hui expects slower growth in the second half.

Shimao is confident about the market outlook due to strong demand and limited supply.

The company's aggregated contracted sales in the five months to May amounted to about 25.34 billion yuan (HK$32 billion), an increase of 54 per cent year on year.

Hui expects stronger sales in the second half.

Standard & Poor's Ratings Services raised its long-term corporate credit rating on Shimao Property to BB late last month from BB-minus. It expected Shimao to generate satisfactory sales over the next two years.

Year to date, Shimao has acquired 2.8 million sq metres of attributable gross floor area for 11.6 billion yuan, investment bank Jefferies said.