Two Chinese cities to tax second-home

January 28th, 2011 - 6:06 pm ICT by IANS  

Beijing, Jan 28 (IANS) Two Chinese cities have launched the first-ever property tax for second-home buyers in an attempt to cool property prices, a media report said.Shanghai and Chongqing announced Thursday that they will levy the property taxes from Friday on high-end, newly purchased second homes, China Daily reported.

The taxes will depend on how the values of the homes compare to average market prices, said the two local governments.

“The property tax can be considered a new measure to adjust demand and supply, curb property speculation and squeeze the housing bubble,” Chen Guoqiang, deputy chief of the China Real Estate Society, was quoted as saying.

Carlby Xie, head of research and consulting for North China at real estate agency Colliers International, said: “The rate, lower than expected, is for the government to test the market.”

The announcement by the two cities comes after State Council’s Wednesday announcement on the latest tightening regulation to cool down the housing market, including raising the down payment for second-home buyers to 60 percent from 50 percent.

“The property tax will send prices down, along with the impact of new housing regulations,” said Lu Qilin, director of Uwin Real Estate Research Center.

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