[photopress:billboard_for_property_in_Beijing_1.jpg,full,alignright]Most Hong Kong-listed property developers who were surveyed recently said China’s new land appreciation tax will not seriously hurt their mainland operations and would not slow their pace of investment.
According to a survey conducted by international accountant Deloitte Touche Tohmatsu nearly 90% of 26 Hong Kong-listed companies agreed ‘their level of mainland real estate investments will not be affected by the tax’. Most of them said they have confidence in the mainland’s real estate sector. 33% said they would increase their investments by more than RMB100 million.
There are now 118 companies listed in Hong Kong that have property or hotel operations in China. Some developers said they have already set aside funds to pay the tax which becomes compulsory next month.
The land appreciation tax was introduced in 1993, but was collected on a voluntary basis. The central government has said it will be charged from next month on appreciation of the market value of land left undeveloped for three years after the measure takes effect.
Analysts generally believed the tax would drag down profits as much as 60%. But big developers may better withstand the impact due to their robust revenues.
Source: China Daily