The Academy of Macroeconomics under the National Development and Reform Commission (NDRC) has issued a report suggesting the government should adjust policies on the real estate sector to cool down the property market.
Some ways of doing this include increasing income tax rate from residential property transactions, establishing a property tax system, and abolishing sales houses whose construction is incomplete, putting a levy on windfall profits on property sales, setting up a new house vacancy tax on developers, and increasing land value-added tax rate. All in an effort to hold back surging investment in property sector.
The report said, ‘The central and provincial governments should abandon the belief that real estate is a pillar industry for economic growth.’
The report also suggests the government should not encourage people to have more than one house.
According to the city’s Housing, Land and Resource Administration BureauAverage housing price in Shanghai has rocketed from RMB4,010 ($519) a square meter in 2002 to RMB7,038 so far this year.
House buyers are asked to pay first for a reservation as many developers pretend that flats could be sold out soon. The naughty developers then collect all the reservation money to buy an area for the building and to pay for the construction cost and the interior decorations.
Statistics from the NDRC and the National Bureau of Statistics showed that in last March, the housing prices in 70 big and medium-sized cities across China rose by 5.9% compared with the same period last year. The growth rate was a 0.6% higher than that of last month.
Sources: China Daily and Shanghai Daily