Why do we need property tax

 Why do I need a property tax?
Guests and information network : you and hearing friends, good afternoon everyone! welcome to watch and Infonet two special events, the theme of this program is our property tax, this time we are invited guests Institute of Industrial Economics Chinese Academy of Social Investment and Market Research Office Mr Cao researcher, I was special and chairpersons Zhang Yang telecommunications network.
Mr Cao: Moderator good netizens Hello everybody!
Moderator: teacher at the outset to give you a brief introduction of property tax, because under the name confusion, some users have been put to us that the property tax and property costs are not the same thing. Please briefly describe,
Mr Cao: property charges is purely a civil concept of market economy, companies provided us with services, to whom we pay it to the barber shop with the same haircut. Property tax is a property tax, and property taxes are the main forms of European and American countries. In a market economy country, the government mainly for personal taxation; mainly to the Chinese government tax business, but are ultimately borne by the individual. So in China, we mainly adopted a system of indirect taxes; in Western countries as the main direct tax is essentially the tax system. because the property is the most significant in nature, based on the personal taxation of property to become a natural choice. Generally speaking you how much property, how much tax I sign you, this is relatively more equitable. two major types of property, movable and immovable property, The two real estate is constantly consumed inside, so its value relative to the real estate is relatively low. gold, jewelry to the value of a larger portfolio (of course this is not included in the deed and lease) value is large, but relatively a large number of movable property is constantly in terms of consumption.
Moderator: What kind of movable property means?
Mr Cao: We have daily necessities, family and consumer durables, consumer durables should be based, including the above said jewelry , gold, securities, etc, it is movable. Real estate refers to land and housing, both residential use of property, but also the production of real property, including farmland. in the general market economy, the real estate market, healthier, more of your construction area large, the greater real estate values; but in some countries real estate market, real estate, not the health of the land where the decision may be based on property value, the greater the land area of the larger real estate values. In fact the main form of real estate value of the construction costs, due to the formation of a large number of construction materials into value, the value of the land itself is soil fertility, or the location advantage of the differential rent of the capital of the decision the decision, a little in terms of investment value over the ground floor. In developed countries, such as the U.S. in movable and immovable property, the real part of all the property in the account for about 90%.
Moderator: a high proportion of real property.
Mr Cao: Yes, a relatively high proportion. This is about what is the concept of property , it is not the concept of housing, including land and fixtures. from the current situation in China, we put the property value and building a growing gap. So in China, more by value of the property consisting of land, So we focused on the common land and housing tax. In Western countries mentioned above, the property tax is a very important tax, the local government of their country's main source of income tax. China's tax system, because it is imposed as to the enterprise Lord, the residents bear the tax burden is indirect. If the property tax levy this tax in China, there is there is a corporate tax and personal tax rate plus the total balance of the macro, so the situation is more complex.
chair by: Cao teachers just give us more people in our country may be the turnover tax, because of the indirect tax, turnover tax based, while the Western countries to direct their direct income taxes, property taxes accounted for on a high ratio. Why property tax in China?
Mr Cao: tax on property tax purposes each country is different. As one of its basic function of taxes is to supplement the national income, as a part of the budget, which is an important basis. In Western countries, local government property tax is the most important source of revenue. such as the United States, the federal government rely mainly on personal taxes and corporate taxes to generate revenues, but the average American state and local governments from about 30% in property taxes, property taxes and 90% from the real estate tax.
Moderator: That means that in the example the United States with your property tax, property taxes in the United States is called, is the main local tax. < br> Mr Cao: And he is an important source of revenue for local governments, this is one of their situation. because, like enterprises in China, the ratio is already very large collection, so the purpose of levying property tax, should not be to increase revenue, but the adjustment out of control real estate market. Now our real estate prices high because a large number of people hoarding houses, hoarding itself pushed up prices, so this time we should adjust the property tax by the real estate market. Of course, regulating real estate means the market can not rely solely on tax revenue, we also need some means of monetary policy. because the real estate is an important financial activity. the impact of taxes on real estate investment, is generally very straightforward. So in general property tax levy, or is based on the purpose of increasing revenue, because property is the most dominant, the captive, the property survey should be said that even easier than the census. because people can hide out, one can flow, but the property is real property, so property survey is the most convenient.
Moderator: You mean that property tax can also be said to be property tax, because it is the property tax base, so the tax is clear.
Mr Cao: very clear, that is, the tax object very easy to find. After valuation, the statutory tax rate setting, and can become the main way the government taxes. If the property tax as the main form of taxation, government revenues can be long-lasting protection. In addition, long-term property tax can play a regulatory role in real estate prices. because housing is the endurance of things, in particular its attachment to the land, its durability and limited nature, very easy to speculation speculative hands, so property tax is another important function is to regulate the functioning of markets . Generally speaking, market-economy countries to increase government revenues based on the purpose of levying property tax, but in China is mainly based on the purpose of regulating the real estate market, property tax levy.
property tax revenue to the local government determine the tax rate residents the right to vote
Moderator: Cao teacher just tells us about the international property tax has two purposes, first for the purpose of raising revenue, such as those in Western countries like the United States, the property tax is the main local taxes . The second purpose is to regulate the real estate market, our collection of property tax for the second consideration, China's tax revenue growth year after year, close to five trillion in 2005, tax revenue is guaranteed, so the main purpose is to control the real estate market. just teacher at virtually to introduce a lot of foreign experience and maturity of the practice, although not yet of the property tax levy, but other countries have precedents, you give us some details of the property tax practice of other countries.
Mr Cao: I mainly introduce the United States where the United States .2001 property tax, 85% I mentioned earlier are real estate tax, state tax which it should be said that the proportion is relatively high. In central government, that is, Federal government revenue which proportion is zero, but the proportion of local government in nearly 30% of the total, of which the proportion of the state government level is relatively low, is about 2%.
Host: Cao teacher, according to your The proportion saying that he is zero in the Federal District, in place where it?
Mr Cao: in fact it is a local tax. because the property itself is an important local property, an important property of a city.
Moderator : In accordance with the ratio you say about 35%?
Mr Cao: 30%, said the average combined state and local government accounted for 30%. but in different levels of local government, there are significant differences. Comparison of the proportion of state low, the state essentially does not rely on property taxes at this level is probably less than 2%; but at the county level is about 68.3%; at the municipal level is about 53%; school district is about 70%; the SAR at this level 96%. such a distribution, because their local governments, as counties, cities, towns, is a local government, as a local government to give residents a public service, its revenue mainly from property taxes, in part, personal property tax. Specifically, local governments at all levels in the property tax distribution, of which 4% of all U.S. property taxes for the state level, county level of government for 22%, 28% for the municipal level of government, 18% for the school district level of government, 4% for special regional government, it is ultimately the distribution and use of a property tax situation.
U.S. Property tax is levied based on property values, not imposed by area . Real estate property value just said 90% of the total value of the property, including real property accounted for 52% in residential. residential single-family homes there, as we have now is a mix of residential apartments, and single family residential property, which accounted for 52 %; commercial real estate accounted for 15%; industry 6%; agricultural land accounted for 6%; space accounted for 4%. From here you can see that the U.S. real estate property values, the most important is to have buildings, particularly residential buildings, the total value is the largest; the value of open space is very limited, we know that the U.S. share of very large open space. based on the annual assessment of the local government is often assessed value of real property, local governments can set a the statutory property tax rate. The property tax rate in general how to determine it? be determined by Parliament. The tax rate is based on the number of major development? the most important is to see this level of government need to spend much money. As the main local government taxes is the property tax, property tax levy based on the existing object, about how valuable, according to the value and tax amount, probably you can set a statutory property tax rate, then charge. because just about the property, especially Real estate is placed in the next surface, so collection is relatively easy. But if the proportion of local government taxation is too high, people may be discontent, or by representing their interests reflect the views of Members, this time is hand vote; also vote with their feet, and I sell this house, not the place to live, and then I will not give you pay taxes. If the residents feel more taxes, quality of service is not enough, they have the right to migrate. Therefore, a city outside the main income is from personal income and personal property become a major government revenue, government officials must please the people.
Moderator: Just now you talk about voting and voting with their feet by hand, such as some of you just talk about tax rate and the tax base determined by the board decided to specifically explain Why?
Mr Cao: the assessed value of the tax base is simply fixed, but how much tax has been imposed the consent of Parliament to vote; the government how much money to spend, according to budget decisions.
Moderator: That is if the levy more taxes, he may by agreement with you is reflected in the Members, which is hand vote; this tax if he is still dissatisfied, he may come to other regions, this is their feet vote.
Mr Cao: Yes, competition is the Western governments, and not in business. Of course they also need business over, the enterprise over the advantage to live at my place to provide job opportunities, the Government thought of or residents. But in our country, our government is the corporate tax levy, residents of the tax is actually paid is reflected in the sales value of which the enterprise. So companies are actually paying for. Although we pay a tax, and But the government does not think we pay taxes, the government services to individuals is relatively limited, but it is a large number of business services, and over-enthusiasm. you look at the current party secretary of hatred and Kunming, and more enthusiasm for business owners ah! we see some large number of local officials on the energy used in the investment, but people in public service, they do not do. The key is that people do not pay tax officials, tax comes from business. in the West countries, the government is well aware that the tax from individual residents, residents who live in my more government may impose more taxes, the more able to provide more public services, the city has more competitiveness.
Moderator: Just Cao teachers experience in the property tax through the introduction of U.S. made and reflect on some of the things in our favor, such as teacher at the first point made earlier, he said, the final property tax revenue for the state of the entire tax , local government, if it is a national public goods provided by the National, if the local public goods provided by local, then the main provider of local governments to obtain revenue of local public services, and residents can also vote with their feet, if he felt at the local pay relatively high property tax, but not enough local public services, he can move to other places. relative to our country, maybe he felt the property tax by local governments to raise enough funds can be used for public services, This may levy taxes than some other countries learn from other countries such as he can in these areas is the main business tax, then he will take into account the livelihood of the tax levy less.
Mr Cao: This is the situation in China. < br> Moderator: teacher at the second point also made earlier, that the U.S. property tax assessment method is based on the price assessment is in accordance with the specific housing and land value rather than according to his area, is in accordance with the area than might be imposed simple, because much of the area of how much tax to pay.
Mr Cao: But will lead to an unfair tax burden.
Moderator: So, according to the assessment of the value of this is a worthy lesson.
Mr Cao: But the value of the premise that we need to assess the real estate market is healthy, said in Hangzhou now has more than 20 yuan per square meter house. This is a big if, then taxed, the tax burden is very heavy. In developed countries, a property may To face the multiple levels of government taxation, because the specific location you must be the lowest level, the above multi-level local governments involved. For a housing, in general, this state may levy property taxes from your county may also collection, the town should charge, and even school districts have levied. taxation, it tends to need to consider what proportion of this tax to the state level of government, what percentage of the county level of government, every government has a proportion of all final Total. so that the sum of property tax to form a total tax rate. and this rate should be said that property tax rates in different regions is not the same. For example, I was at my community, other communities and I am not in the same primary local government, may face as real estate tax rate is not because they are spending side of the grass-roots government less likely.
Moderator: the quality of public services is to provide a relatively worse.
Mr Cao: not necessarily , where the government may be more economical and more efficient. So the same amount of tax, some government to do good things, and some governments do not, some do more so the proportion of income is relatively higher, inside the concrete so it is more complex. So instead of a uniform tax rate. But in the specific primary government, the example we are in a small small town, and goes no smaller government, and The town's real estate tax should be uniform; another town may not be united, because in the county are unified, but each town is not uniform between.
Moderator: Just tell the teacher according to Cao , a small place in the United States imposed property tax may be imposed together with different levels of government, such as membership of the county, under the ground, under the common sign of the city, the last is a summary of the situation said.
Mr Cao: Yes , which is a tax you, all local governments should also be divided tax.
Moderator: You can say that these taxes tax policy and tax reform, property tax is more concern by our residents, one of the reasons it now to have connections high prices. here on behalf of friends ask you, since you said a property tax, housing prices will do?
Mr Cao: As for now, then bought a house there are two ways in order to profit, A rental profit, I think the rent has surged this year in Beijing, but I know other cities do not have much change. For example, I know the rent in Guangzhou does not change, the Beijing Olympic Games because of factors that have a large rent increase this year . But 05, 06, 07 years is basically not up the rent. We face inflation in recent years, the grim situation, in such conditions, the average rent level in Beijing, and not much increase is due to housing use oversupply on the market. But in 2008 have risen. even though they have risen, many people bought a house for rent, the rent level is still barely sufficient to pay interest on the part of the monthly principal owner must pay for his own, so buy rental house to recover the investment alone is simply not possible. I am going to Handan, where only 60 square meters of the house rent 500 per month, year is 6000, and where every house has been amazing m 6000. so I figured I had 60 years to recover the cost, if the interest, property costs, maintenance, and other factors into account gap, I think 100 years, or even 150 years is impossible to recover the investment. so long as return on investment, return on investment really means that he can not, I do not consider the housing depreciation part of the consideration if he is purely a loss. so the current price based on my estimation, is in Beijing, Beijing's house general as Third, Fourth and near the house, according to my point of view about the value of 3000, he sold 15,000. that artificially high housing prices in Beijing five times, but the rent has not changed much, so rents and housing prices in Beijing the proportion of completely out of control, in the normal region is equal to one years rent price is 120 months house rent, if counted by Handan is just 60 years.
property tax is the overheated real estate market pour cold water
Moderator: as you said in the departure of prices and rents are high.
Mr Cao: departure from the already very high. The so-called return on investment by leasing the house, basically no value. The most important rely on value added, of course, does not rule out real estate speculators who rented the house. If I rented the house, the rental income can offset some of the normal management fee, maintenance, and part of the interest. But in the case of housing prices, I part of the appreciation can be obtained, sufficient to cover this part of the principal part of my pay every month, so this is the case I earned. This is why a large number of people put housing as a speculative chip. In fact, speculation and investment is mixed together, I side in the rental, I was waiting to sell at high prices, but essentially the appreciation of some of his money comes from, in essence, we are all in the speculation. on speculation now our country is absolutely nothing, and a market economy after , we want to do what is more important that the housing needs of the country is very large pull on the national economy. The actual situation is indeed the case, only this part of the real estate industry is currently accounted for 5% of GDP of our country. This is just part of the developer, but he was pulling our entire economy is very large. It should be said with real estate-related investment activities, accounting for 50% of all our social investment is about. For example, I own the real estate development and construction activities required construction activities require a lot of building materials, building materials which is very important that the steel, cement. as the proportion of steel now is a big investment in the country, iron and steel were 60%, the proportion is even higher for building materials. for steel materials should be said that relatively poor quality, and scientific and technological content is the lowest, but in short supply; industrial use of steel high technological content, good quality, but in fact supply. iron and steel industry to bring iron ore prices move up, iron ore freight and international shipping needs, leading to a sharp rise in the value of shipbuilding. These are real estate driven. So the real estate in our country's contribution to national economy is too large, so that countries in order to ensure the rapid growth of the national economy, in order to ensure Our economic growth rate did not fall down, the central real estate has been completely permissive attitude.
the other hand, the local government's reliance on the real estate is very large. land transfer us to the net to count, not purely transfer payments, after deducting the net this land transfer, coupled with the real estate-related tax burden, accounting for 50% of the country over the local government. Moreover, between officials and developers have a close personal relationship, Therefore, half of local government revenues by the real estate, the central government to maintain economic growth depends on the glossy real estate, this is basically China's economic growth is driven by real estate, or that China's economic growth is driven by real estate developers. Why real estate developers so vigorously to promote economic growth? should become a modern Huolei Feng. But we see that the whole society to open a low moral evaluation of the developer, the developer's social reputation is very bad. This is because China's economic growth While driving through them, but the pull is not a healthy boost. We know this place like Tibet, the Tibetan antelope hunting is an economic activity. through the purchase of shotguns, hunting hire someone to sell antelope, which is a gray GDP industrial chain, which is great value to calculate the GDP. But the creation of the GDP, is based on based on the extinction of our species, so the GDP creation, essentially meaningless and endless regret. Why is the Tibetan antelope Industry Chain pulling gray economy so vigorously? this is obviously the driver is a windfall. like drug trafficking as drug manufacturing, drug manufacturing drug completely open to Economic Growth is very large. So the growth in real estate is not a return to the community, not for the country benefits, but the profits-driven results. now only do real estate, so long as to get a piece of land, with local officials, bank officials collusion to be rich. There is nothing of real estate now means easy riches, and upstart not only legitimate but also high social status. you look at the representatives, this year I will not hold much hope for them. What they can give a good word? real estate officials do not want prices down, developers do not want prices down, the banks do not want prices down, our iron and steel enterprises will not hope that prices come down. If house prices come down, first to the bank, then is our steel plants, it can be said to be closed most. so they do not want prices down, with our economy in the main not from the developer related. It is also representative of developers around the Real estate should be said that China has become the best career. to profits, they are very strong desire to invest, the economy can not stop driving. this time as soon as property tax, the real estate industry as a whole, it can be said to be poured pot of cold water.
Host: Cao teachers have to tell you, he said, fast real estate development, from the perspective of overall economic development, real estate development just Cao teacher said economic growth could bring the whole 50%, this ratio is probably because the relevant iron and steel, cement industry, they stimulated the development of the GDP.
Mr Cao: Because they are for real estate services, said to be upstream, downstream in fact, except for real estate Tau is looking.
speculative real estate property tax revenue by reducing the down home prices
Moderator: You mean like in accordance with, the development of their countries want to stimulate the economy of real estate there, the other from the local government, housing to enable local industry to increase revenue, related to taxes, land transfer is as you just described 50%, so it can be said to have wanted all aspects of real estate development. you said that once the introduction of property tax, then if can be poured cold water, it can reduce the price, you talk about how lower property tax rates?
Mr Cao: Because in China, now the speculators are pushing up prices of a subject. As for the upstream real estate developers, in fact, land speculation, he bought land at high prices after it cut into small pieces to sell, of course, the way he sold a house to sell. in fact they are selling land, but in our pure land trade is allowed, it must be built a house. appears to be to sell the house, in fact, in the trading of the land, and real estate developers engaged in pure speculation, he actually has no money, he is from bank loans, through the empty glove White Wolf, leverage out the house down.
Moderator: You just said that house prices so high in fact land prices up?
Mr Cao: Yes, we are now an average of 15,000 yuan in Beijing housing prices, many place for more than 2 million, in fact, the real construction cost is 1,000 yuan, the rest belong to the land. this one, the local government's windfall profits tax, profits of developers, speculators who sell back room revenue, have included in the premium inside. Our house in the 15,000 yuan, including a large number of intermediate links of the profit, the real capital of the part of the differential rent of land, is actually very limited. you live in this place can bring many benefits, which is limited. For example I live in the city I run a small number of road every day, saving time, this time to earn some extra money; can enjoy the many public facilities? the interests of the day, how many, how much I can be converted each year for decades, and how much interest a hundred years, this is the differential land rent capitalization, that is, the real value of land. differential rent is actually very limited, but the premium pricing based on differential rent, housing prices, now we have too much speculation high, and completely rely on the imagination, totally divorced from practical. So, like this case, the property tax, you can quickly put you down speculation of income, and reducing the expected return of speculation. As people's income real estate from the appreciation of the final part of the land, once we impose the property tax, real estate would constitute a fatal blow. is generally believed that the property tax should be about 1%, which can levy is part of owner-occupied housing; also is the first an exemption from the introduction of the second set, but the calculation of family housing in copy number across the country. But for a family with multiple sets, should be accumulated charge. If you have multiple sets of symptoms may be the last to 8%, 10% It is not impossible, but not not operational. I generally levy to 1%, more gradual increase in sets of symptoms, several sets of value-added benefits by way of levy of property tax return; addition to tax the transaction itself, the transaction Transaction tax and income tax, property tax in particular, the longer the holding time to pay more tax on the speculators in terms of total losses than gains.
Moderator: That is some speculation that the person another job because of taxes, exemptions speculation.
Mr Cao: Yes, because China's current prices are too high levels of speculation. property tax should be said that is speculation for lower income speculation. If a lower proportion of the year, the capital of his future income to fall significantly. so means that there will be a sharp fall in house prices. So we are very concerned about property tax, and property speculation concern, people are concerned. Some people concerned about my own house Son is now very expensive, and I can sell it to the highest price. For example the people at home do not have money, I had a suite, but I sold to rent. I now have a hundred square meters of the house, my house a sub- No money, I need a lot of money, I can consider selling the house. I sold 1.5 million square meters of 100, I sold you can rent a house, I can choose to rent remote areas, small in size, so this room Price to cash out. Some say that low price does not matter to us personally, because it is live, these words are not true.
Moderator: You just give the example of a house can be realized.
Mr Cao: You can realize that I can settle into rental housing, in fact, the money at hand. If the future price is falling, and so down when I buy, to say he did a very nice trading.
Moderator: But the example you just might be a handful of residents to their children to school to sell the house.
Mr Cao: The majority of those with second and third sets, or even more. like Shanxi In Beijing, a coal owner to buy a few units, dozens of sets, hundred of the buy. After a few years, significant appreciation of these houses, so the coal bosses are now sold out. Now we see the original group of those buying personally received by the local government, they are welcome to push up prices, so it is foolish leaders. We look at real estate group last the people of this place to us what benefit it? nothing more than to bring prices move up , large real estate group interests are taken away to the city drained the public purse. so real estate people in the community appears to contribute to what is what? should be a lot of benefits to all sucked, the actual is the main damage to the local interests. Therefore, the Government must crack down on property speculation. some people do not agree to crack down on speculation in the market economy, which involves a lot of economists. Some people talk about real estate over the past contributed to the community, It now appears that the contribution of real estate, to a certain extent, promoted the local population can not afford housing, who can not afford housing situation, pulled out a large number of benefits are foreigners. I said foreigners are not here who live and work, They only store room here, these people are black sheep in the local. it is necessary for these groups to implement appropriate means of economic adjustment. Here both tax measures, there are credit facilities. Now our banks review home loans did not increase, making the fried room who can leverage a very low proportion of prepaid long as the rest paid by the bank. due to lack of property tax adjustment, China's housing is currently the best speculative tool; and people are generally very large appetite, I fry The copy number of the more room the more you earn. because almost do not pay holding tax, and the price of the existing policy and the participation of all parties is rising, but also through bank leverage, even if not so much money I can fry Many of the house. on the basis of housing transactions we also gave birth to a huge housing estate industry, on the one hand to promote the housing transaction, on the one hand and participate in speculation. a combination of these factors, resulting in rising housing prices, the investment put into production One can not lose the way. So now almost qualified city residents, and everyone in real estate. Why is everyone the real estate, mainly to make money we all saw it. We have seen the other hand, their continuous depreciation of money, so eager to throw away money for the house.
countries at this time that the land is not enough, this is not the real reason. the real reason is not enough housing speculation, speculation is not enough chips to use. of speculators who , the more the better chips, so the house was a lot of speculation, hoarding by speculators. speculators bought homes not to live, but to sell, so the speculators do not demand, he is a middleman, he is a supplier . for such providers, the State must introduce a policy to force them to throw house, so that smooth flow. like the early fifties the hands of food store operators in the food, the state introduced the policy forced him to throw away the food . Our country was adopted to stabilize food prices, falling food prices caused by the situation, forcing them to throw out food. Now many local governments ...