More buyers seal home deals ahead of likely property tax
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More people in Shanghai are rushing to buy a home or concluding a purchase deal, particularly for high-end spacious houses, ahead of an impending property tax, according to a latest research conducted by a local estate chain.
The transaction volume of existing homes, with a floor area exceeding 140 square meters and costing at least 3 million yuan (US$456,000), jumped 36.4 percent in the first half of January from the same period a month earlier. For homes costing more than 10 million yuan, there was a 100 percent jump in sales volume, Century 21 China Real Estate said yesterday after tracking its 300 branches across the city.
But deals involving apartments with a space of no larger than 90 square meters and costing not more than 3 million yuan fell 13.8 percent during the period, the firm said.
"Some of our branch managers have confirmed that they've been receiving more clients over the past few weeks partly due to an upcoming property tax," said Luo Yinshen, a researcher at Century 21. "Home-viewing trips arranged for potential buyers even doubled recently at a couple of branches located between the Middle Ring Road and Outer Ring Road."
Shanghai is now waiting for the central government's approval to launch a property tax, Chen Qiwei, a spokesperson of the city government, told local media yesterday.
Shanghai is one of two cities in China that will implement a property tax on a trial basis. The other city is Chongqing in southwestern China. Shanghai Mayor Han Zheng told local lawmakers last week that the city's tax will target only newly purchased spacious houses though details have not been released yet.
Analysts speculate that the tax could target homes of 60 square meters or bigger on a per capita basis.
All properties owned by a family will be used to calculate living space on a per-capita basis. Anything over the minimum threshold may be taxed 0.5-0.6 percent.
If the property is bought after the tax is imposed, the authorities will add up the total housing space a family owns.
