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New property, fuel tax mulled

(Shenzhen Daily)
Updated: 2007-01-29 15:57

China is considering a new property tax to cool over-investment in real estate and a fuel levy to reduce oil consumption, the government said.

According to the State Administration of Taxation's 2007 working guidelines posted on its Web site, the new tax will be levied when buying or selling properties although it did not give details on how it will be enforced.

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China has worked hard to cool the sizzling property market, hoping to prevent a potentially devastating speculative bubble with a series of measures.

It has increased the down-payment for large new apartments to 30 percent of the unit price from 20 percent and has imposed a transaction tax on owners who resell their units within five years of purchase, up from two years before.

But the property sector remains hot especially in pockets of prosperity and speculation in big cities likeBeijingandShanghaiand along the east coast.

The State tax administration's guidelines for next year also suggested the introduction of a fuel tax.

Officials have long argued that China should introduce a fuel levy and set up an energy-saving fund to help it reduce its wasteful consumption of oil.

China is the second-largest oil importer in the world after the United States and its need for fuel resources has jumped sharply as its economy booms.