What is property tax?

Taxation is closely related to our lives, and property tax is something that many of us will come into contact with in our daily lives. As long as we own land or real estate, or rent a house, we may be exposed to property tax. Although we often hear about property tax, do you know what property tax is? How is the property tax levied? Learn with us.

What is property tax?

What is property tax? Take the value of real estate as the tax basis. According to international practice, property tax is mostly local tax, which is a stable and important source of national finance. The names of real estate retention tax vary from country to country, and some of them are called "real estate tax", such as Austria, Poland and Netherlands Antilles. Some are called "property taxes", such as Germany, America and Chile. Some are called "local taxes" or "rates", such as New Zealand, Britain and Malaysia. China and Hongkong are directly called "property tax". Below, we understand the property tax from a small angle.

1. Conditions for levying property tax: Whether levying property tax can end the real estate war depends on whether the following three preconditions are met: the first premise is to clarify the relationship between property tax and existing taxes and fees, the second is to establish the technical conditions for levying property tax, and the third is to use property tax to change the current situation that most of the existing land fiscal revenue is not included in public finance.

2. The history of property tax collection. Property tax is a tax levied on the ownership of real estate. The current laws and regulations adopt a one-time collection of land use fees for 40 years and 70 years, which leads to high purchase and transaction costs and low holding costs. Therefore, some local governments sell a lot of land in a short time and collect land dividends in the next few decades, which is the fundamental reason for the prevalence of land finance in many places. Property tax can change this reverse incentive system by distributing land income in the next 40 to 70 years. At the same time, in order to levy property tax, the government and developers also have the incentive to create a good social environment, provide sufficient public products, attract consumers to settle in the local area, and enhance the value of local real estate.

3. The role of property tax. As a local tax, the original intention of property tax is to make up for the shortage of local public finance, and then determine the annual income and tax rate of property tax according to this shortage. Of course, property tax payers want the government to provide high-quality public goods. Only by providing high-quality public goods can the government ensure the income of property tax, thus realizing a virtuous circle of property appreciation and government tax collection. Therefore, in order to make all parties generally support the property tax, the most important thing is to make local public finances transparent and efficient, and let the people know the purpose of taxation. Property tax is not so much a challenge to property owners as a challenge to the openness and transparency of local government finances.

4. The basic framework of real estate tax reform is to combine the current property tax, urban real estate tax, land value-added tax, land transfer fee and other taxes into a unified property tax, and keep the overall scale of property tax basically unchanged. In this way, once the property tax is levied, it will have a great impact on the economic behavior of local governments, consumers and speculators.

How to collect the property tax?

Property tax collection is divided into many aspects.

1, in terms of area. According to the normal operation process, the object of expropriation will mainly be houses with an area of 144 square meters. At present, the expansion of the pilot scope of property tax idling does not mean that the property tax will come this year, unless it goes beyond the corresponding legislative procedures, it will still appear in the form of administrative legislation.

2. From the purpose of land use. Specifically, due to the relatively small area of commercial real estate and office buildings, the relevant research and discussion are the least controversial. In 2009, it is possible to start collecting property tax from commercial real estate, and then expand the tax target to owners who own multiple houses, and gradually realize that everyone who owns real estate should pay taxes. No matter which city tries to levy property tax, the short-term impact on the local real estate market will be great and the tax cost will be high. Because it is necessary to find out everyone's real estate, we must also find out the housing in the urban-rural fringe and rural areas, and the current simulation pilot is only for urban residents. Moreover, the levy of property tax has to be decided by many departments, and the plan needs to be reviewed by the Legislative Affairs Office of the State Council before being submitted to the National People's Congress Standing Committee (NPCSC), and then submitted to the National People's Congress after several readings. It will take at least three years to go through all the formalities.

3. From the expert's point of view. As far as housing area is concerned, the collection of property tax can be divided into ordinary housing and non-ordinary housing. The state encourages the development and consumption of units less than 90 square meters, and does not interfere with the development and purchase of units of 90 ~ 140 square meters, but it has always held a restraining attitude towards the development and sales of large units above 140 square meters. Therefore, at present, some experts believe that the defined value of property tax is 144 square meters. In other words, the housing area is above 144 square meters, which belongs to the scope of property tax collection; Otherwise, it is exempted.