Analyst Note| Cheng Wee Tan |
Over the weekend, China adopted a decision to carry out an expansion of the property tax pilot scheme. However, while the property tax in pilot regions would be implemented for all types of properties, rural properties are to be excluded and there is a still a lack of details on the proposed new tax and pilot schemes, and in which cities or regions. We have noted that the pilot scheme is not entirely new. In previous property tax pilot schemes that were implemented in Shanghai and Chongqing, the tax rates were relatively low and had small coverage with limited impact to the property market. This time round, we expect there should be deviations to earlier pilot schemes and they are likely to be implemented in markets like Shenzhen and Hainan.