(Yicai Global) Dec. 20 -- The Chinese government has affirmed its plan to introduce a property tax, but did not reveal specifics of the scheme.
China will collect taxes from homeowners based on the assessed value of their real estate, said Chinese Finance Minister Xiao Jie.
The ministry will push forward property tax legislation and implementation, Xiao wrote in an article the People's Daily published today. Authorities will calculate tax on real estate that industrial and commercial entities own based on assessed prices and reasonably reduce real estate construction and trading taxes accordingly.
Xiao did not provide a detailed timeline, and said that the new tax is subject to the rule of law. China will adopt legislation to replace administrative tax regulations the State Council laid out and repeal them, Xiao said. The government will strive to fulfill legislative formalities before 2019, and enforce the 'legal principle of taxation' by 2020.
The country has been working on measures to tame rampant house prices. Property taxes have existed in China with a limited scope and pilot programs began in 2011 in Shanghai, where a rate of between 0.4 percent and 0.6 percent applies to certain properties, and in the southwest city of Chongqing, where rates are between 0.5 percent and 1.2 percent.