| China's land-use tax to be tripled |
SHANGHAI, Feb. 7 -- China will triple its land-use tax this year, and foreign developers will lose an important tax advantage as part of the country's efforts to cool its booming real estate market, the State Administration of Taxation said in a recent notice.
The land-use tax imposed on developers will be raised to between 1.5 yuan (19 US cents) and 30 yuan per square meter per year in big cities, depending on the size and location of the property, the ministry said.
Land-use taxes in other areas will be lifted by 0.6 yuan to 24 yuan.
Budget apartments built for low-income families will remain exempt from the tax, the notice said.
In addition, overseas-invested real estate companies will be required to pay the same land-use tax as their domestic counterparts for the first time, according to the administration's statement.
"The land-use tax and other property taxes specified earlier will surely have a very positive influence on the healthy development of the country's real estate industry," said Shao Minghao, an analyst at the Shanghai Hanyu Property Agency Ltd. "Meanwhile, operations costs for overseas-invested real estate developers will be increased due to the land-use levy."
Last month, the State Administration of Taxation said on its Website that it will begin to formally levy a value-added tax on land - 30-60 percent of developers' net gains from property deals - effective February 1.
Also in January, China construction Minister Wang Guangtao said the central government intends to require owners of large apartments to pay an annual tax on the value of their homes at some point in the future.
The initial reaction by overseas developers is that the land-use tax won't have a major influence on their development plans.
"Our finance department is currently working to check how big an effect the new policy will have on our business operation," an official with Keppel Land, the property arm of Singapore's Keppel Group, said in an interview yesterday. "It may affect our profit margin to some extent, but it won't change our long-term confidence in and commitment to China's real estate market."
Keppel Land has developed several residential properties in Shanghai, including the Park Avenue condominium project in downtown Jing'an District and the Villa Riviera project in suburban Qingpu District.
|
|
