In order to adapt to market changes, real estate tax legislation has been suspended
A few days ago, the "Legislative Plan of the Standing Committee of the 14th National People's Congress" (hereinafter referred to as the "Plan") was released to the public. Among them, in the field of finance and taxation, the Value Added Tax Law, the Consumption Tax Law, the Tariff Law, the Accounting Law (revised), and the Tax Collection and Management Law (revised) clearly intend to be submitted for deliberation during the term of office of the Standing Committee of the National People's Congress. The budget law (revision) needs to be worked quickly and submitted for deliberation when conditions are ripe.
The much-watched real estate tax legislation and the revision of the personal income tax law were not mentioned in the legislative plan.
Back in 2013, the Third Plenary Session of the 18th Central Committee of the Communist Party of China proposed for the first time to accelerate real estate tax legislation and promote reform in a timely manner. In the Legislative Plan of the Standing Committee of the 13th National People's Congress, the real estate tax law is included in the first category of items, which is a draft law that is relatively mature and will be submitted for deliberation during the term of office.
In October 2021, the Standing Committee of the National People's Congress adopted the Decision on Authorizing the State Council to Carry out Pilot Work on Real Estate Tax Reform in Some Regions. However, in 2022, the Ministry of Finance clarified that there were no conditions to expand the pilot cities of real estate tax reform within that year. In the end, during the term of office of the Standing Committee of the 13th National People's Congress, the real estate tax law could not be submitted for review.
In this legislative plan, real estate tax is not even mentioned.
Li Rong, a professor at the School of Finance of Chinese Minmin University, believes that because real estate accounts for a very high proportion of the wealth of Chinese residents, it is relatively more sensitive. At the same time, in recent years, the supply and demand relationship in China's real estate market has undergone major changes, from anti-overheating to anti-overcooling. At this time, the hasty implementation of real estate tax will adversely affect China's real estate market and even economic development.
Xiong Wei, dean of Shenzhen University Law School, also believes that the legislative plan does not mention the real estate tax law, which sends a clear signal, which is related to the situation in the previous real estate market and the change in the country's policy stance on real estate. Generally speaking, it is still in the stage of encouraging consumption and stimulating domestic demand, and it is not the best time to consider promoting real estate tax.
"Of course, the fact that real estate tax legislation is not included in the Plan does not mean that legislation is abandoned," Sun Kunpeng, associate professor of the School of Finance and Taxation of the Central University of Finance and Economics, pointed out that real estate tax legislation needs to be considered holistically, and it is necessary to be highly cautious in releasing real estate tax-related policy signals to the outside world. Given the current economic situation, it is necessary to suspend real estate tax legislation. In the long run, the direction of real estate tax legislation and the establishment and improvement of the local tax system has not changed, and it is not ruled out to continue to promote relevant legislative work when conditions are ripe.
Shi Zhengwen, director of the Finance and Taxation Law Research Center of China University of Political Science and Law, also said that from the perspective of promoting the modernization of national governance, the construction of the local tax system, and the healthy development of the real estate market, real estate tax will still be introduced in the long run, and the general direction of real estate tax legislation will not change. For example, in the future, real estate tax will merge the current property tax and urban land use tax, and involve land value-added tax. These three taxes are currently provisional regulations of the State Council, and none of them have been included in the legislative planning of the Standing Committee of the 14th National People's Congress, which also shows that the legislative direction of real estate tax has not changed under the principle of statutory taxation.
"In the future, real estate tax will still launch reform pilots in some cities with mature conditions in due course, and promote legislation after summing up experience." Shi Zhengwen said.
Tian Zhiwei, deputy dean of the Institute of Public Policy and Governance of Shanghai University of Finance and Economics, added that even if real estate tax legislation is promoted in a timely manner, it is necessary to pay attention to the methods, methods and skills of taxation. Pilot real estate taxes from incremental rather than reforming the stock market in one step. "For example, a real estate tax is levied on newly purchased first-hand housing; Thereafter, real estate tax was levied on second-hand housing in transfer transactions; Housing stock is exempt from taxation. In this way, the impact of real estate tax on the market is reduced, and the real estate tax problem is gradually solved through the accumulation of time. He gave an example.
