A long-awaited plan for a property tax has stalled. The average price of a Shenzhen home last year was 41 times the average income, against 29 in London, 23 in Tokyo and 15 in New York. For years, economists have advocated for China to move away from administrative tools like purchase bans in favor of a property tax. Top Communist party leaders committed to imposing a property tax in a landmark blueprint for economic reform approved in November 2013. By imposing an annual levy on home ownership, a property tax would reduce the appeal of housing as a speculative investment. Yet market observers say there is little prospect of the government implementing a tax within the next few years, according to the Financial Times. “The concern is politics. No one wants to be blamed for bursting the housing bubble,” says Gan Li, director of the CHFS and professor of economics at Texas A&M University.
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