An Economic Analysis of Pilot Property Tax

Abstract

In 2011, the pilot property tax was introduced in two cities in China,
Shanghai and Chongqing. This article focuses on comparing the effects and results of
the tax in the two cities after implementing the tax for one year in four aspects: the
taxpayers, the real estate market, the local revenue and the purchasers. The conclusion
is that the pilot property tax in both Shanghai and Chongqing has not achieved the
expected goals. The price of real estate in China currently continues to soar. The
income from the pilot property tax is not enough to better the public house policy. The
tax is unable to influence the policy of land premium, which contributes to more than
half of the income received by the local authority.