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| China announces new real estate tax amid efforts to cool price surge |
BEIJING, Jan. 18 (AP) -- China's government has imposed a tax on new real estate developments, adding to efforts to restrain a rapid rise in housing costs, a state news agency reported Thursday.
The tax, which takes effect Feb. 1, will be equivalent to 30 to 60 percent of developers' net gain on a real estate deal, the Xinhua News Agency said. It did not give details of what types of property would be affect or how the tax would be calculated.
The tax was approved by parliament in 1993 but was not collected until now due to a recession in real estate development, according to Xinhua.
Beijing has imposed a series of measures in an effort to cool a boom in construction and bank lending that Chinese leaders worry could spark inflation or a debt crisis.
The government also is trying to encourage developers to supply more moderately priced housing instead of villas and luxury apartments.
In 2006, prices of newly built homes in many cities rose more than 10 percent, according to Xinhua.
Authorities have raised interest rates twice in the past year and banned outright some types of construction such as luxury villas.
To discourage speculation, the government also has imposed a tax on sales of existing property that is held for short periods.
The government also is trying to push developers to build more moderately priced housing rather than villas and luxury apartments.
Local authorities in some areas have begun collected a tax of 1 to 2 percent on sales of newly developed houses
Investment in real estate in China in the first 11 months of 2006 was up 24 percent from the same period of 2006, according to Xinhua.
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