(Yicai Global) Dec. 15 -- China will trial a real estate tax in some regions before drafting legislation to cover the whole country, according to two bulletins published on the website of the National People’s Congress.

The bulletins are transcripts of two addresses made at the 31st session of the Standing Committee of the 13th NPC in October. The NPC’s top decision-making body announced that month that it would roll out pilot schemes in some regions, Xinhua News Agency reported earlier.

One of the bulletins presented the interpretation of a document called ‘The Decision on Authorizing the State Council to Conduct Property Tax Trials Work in Some Areas (Draft)’ by Finance Minister Liu Kun on behalf of the State Council, China’s cabinet, and is the first official interpretation of such a tax in the country. The other bulletin presented the results of the document’s review by the NPC’s Constitution and Law Committee.

According to Liu, the State Council suggested “pilots in some places first before conducting uniform national legislation” because property markets vary in different places. With the NPC’s authority, the cabinet will formulate measures and specific policies for trialing a property tax. The local governments of the pilot areas will draw up detailed implementation rules and measures to carry out the tests, he added.

The tax will be tested on all kinds of residential and non-residential properties in the pilot areas, excepting rural housing. Liu said this aims to lower the impact of trials on rural residents, considering the large gap between urban and rural economic development and incomes.

To avoid affecting production and operations at businesses, the pilots programs will use with the existing rules for the scope, basis, rates, preferences and collection of non-residential property taxes.

Liu's interpretation did not mention factors such as tax rates, basis and deduction standards in the pilot areas.

The NPC should authorize the State Council to gradually explore issues such as tax rates in pilot schemes and make unified provisions only after forming mature experience, the review by the Constitution and Law Committee said, citing suggestions from some members of the NPC’s standing committee.

That is because the residential property situation is relatively complicated, and housing demand and tax affordability of different groups of people vary greatly.

Editors: Zhang Yushuo, Peter Thomas