Shanghai’s pilot project of individual housing property tax continues

On January 11, the official website of the Shanghai Municipal Finance Bureau issued the “Notice on Several Issues Concerning the Implementation of the Municipality’s Pilot Real Estate Tax Collection on Certain Individual Housing” (Hu Caifa [2020] No. 18), which clearly continued the implementation of the real estate tax pilot.

Shanghai has been piloting property tax for ten years

The Shanghai pilot property tax began as early as 2011. On January 27, 2011, in order to further improve the real estate tax system, rationally adjust the income distribution of residents, correctly guide housing consumption, and effectively allocate real estate resources, the Shanghai Municipal People’s Government issued the “Shanghai Municipality’s Interim Measures for the Implementation of a Pilot Real Estate Tax on Some Individual Housing ”(Hufufa [2011] No. 3), it is decided to start a pilot project of levying real estate tax on some individual houses from January 28, 2011.

According to regulations, the real estate tax is collected by Shanghai resident households newly purchased in Shanghai and belonging to the second or higher house of the resident household (including newly purchased second-hand stock housing and newly built commercial housing) and non-resident households in the city. Newly purchased housing in Shanghai.

The applicable tax rate is set at 0.6%. If the market transaction price per square meter of taxable housing is twice (including twice) the average sales price of newly built commercial housing in Shanghai last year, the tax rate will be temporarily reduced to 0.4%. The income collected from the pilot real estate tax will be used for expenditures such as the construction of affordable housing.

It needs to be pointed out that the “Notice on Several Issues Concerning the Pilot Implementation of Real Estate Tax on Certain Individual Housing” (Hu Caifa [2020] No. 18) issued by the Shanghai Finance Bureau this time has been postponed twice.

After the Shanghai Municipal People’s Government promulgated the “Interim Measures of Shanghai Municipality on the Pilot Implementation of Real Estate Tax on Certain Individual Housing” (Hufufa [2011] No. 3), on January 30, 2011, Shanghai Municipal Finance Bureau The Local Taxation Bureau and the Shanghai Municipal Housing and Housing Administration have jointly issued the “Notice on Several Issues Concerning the Implementation of the Municipality’s Pilot Implementation of the Real Estate Tax on Certain Individual Housing” (Hu Cai Shui [2011] No. 10) to further impose real estate tax on certain individual housing Several issues of the pilot were clarified.

In 2016, the Shanghai Municipal Finance Bureau issued a notice on the continued validity of the “Notice on Several Issues Regarding the Municipality’s Pilot Implementation of the Real Estate Tax Collection on Certain Individual Housing”, stating that the “Notice on Several Issues Regarding the Municipality’s Implementation of the Pilot Implementation of Real Estate Tax on Certain Individual Housing “(Shanghai Caishui [2011] No. 10) has been evaluated to continue to be valid, please follow the implementation.

This time, the Shanghai Bureau of Finance pointed out that according to the “Administrative Regulations of Shanghai Administrative Normative Documents”, the validity period of regulatory documents generally does not exceed 5 years from the date of implementation. The Notice on Certain Issues of the Pilot Program (hereinafter referred to as the original “Notice”) will expire in the near future, and the implementation needs to be continued after evaluation. However, due to the reform of the taxation system, the provincial and sub-provincial state taxation and local taxation agencies have been merged. The expression “local taxation authority” in the original “Notice” should not be used. In addition, all county-level administrative districts in Shanghai have been adjusted to municipal districts in July 2016, and relevant expressions need to be adjusted accordingly. Therefore, the original “Notice” was reissued.

1 Response

  1. Alaia says:

    In order to further improve the property tax system, reasonably adjust residents’ income distribution, correctly guide housing consumption, and effectively allocate real estate resources, the municipal government has decided to carry out a trial of property tax on some individual houses in accordance with the relevant spirit of the 136th executive meeting of the State Council.

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