Two property-re­lated taxes may be merged

China Daily (Canada) - - NEWS CAPSULE -

Two ex­ist­ing taxes on hold­ers of real es­tate and users of ur­ban land will be re­placed by a property tax to be col­lected by lo­cal gov­ern­ments, the of­fi­cial Eco­nomic In­for­ma­tion Daily re­ported.

No de­tails were given about when the new tax would be es­tab­lished. China’s cur­rent property tax sys­tem is a hodge­podge of lo­cal taxes levied on con­struc­tion, sales and hold­ing of land and build­ings.

The two taxes are based on area rather than mar­ket value. By com­par­i­son, the pro­posed new property tax on com­mer­cially used property would be based on mar­ket value, while the tax on res­i­den­tial property is not clear, the re­port said.

The two taxes, ac­cord­ing to the Min­istry of Fi­nance, to­taled 384.4 bil­lion yuan ($60 bil­lion) in 2014, ac­count­ing for 6.5 per­cent of lo­cal gov­ern­ments’ tax rev­enue.

The re­port said all new tax rev­enues would be as­signed to lo­cal gov­ern­ments. It also said the new tax rate would be de­cided by lo­cal gov­ern­ments.

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