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Too much of the economy relies on the already shaky real estatemarket for this to happen in the near future imo. A sales tax on third properties and beyond was

Too much of the economy relies on the already shaky real estatemarket for this to happen in the near future imo. A sales tax on third properties and beyond was introduced in Shanghai to curb speculation and couples simply divorced or used straw men to avoid having to pay it.

seanmcdirmid 12y ago
The straight up property tax (per property, no exceptions) will be added at some point. Municipalities can't make so much money by selling land anymore, and the central government doesn't kick back enough tax revenue. Not only that, but they have committed to eventually providing social services to migrants, like you know, schooling for their kids. That has to be paid for someway. But they will definitely hold off for now, a property tax would cause huge devaluations in property prices inflated by the lack of one. But if we get a crash anyways, it will be easy just to add it at the bottom. The question is what is next, with transaction reaching a very low bottom to keep prices from falling, we seem to be in for a long bout of stagnation which will drag down the larger economy even more than if a crash would just happen and we could be over with it.
- unimportant 12y ago
  Local government and companies have borrowed way too much based on real estate value that a crash would be allowed to happen based on what I have read, as it would have much broader implications than in the US. Rents in Shanghai have remained mostly stagnant from what I've seen for the last 2 years, so it's good for tenants.
  - seanmcdirmid 12y ago
    Rents at the high end are completely stagnant, which is why those new apartments aren't being renovated. Not having a property tax leads to hoarding and not putting property to productive use, which screws everyone but the princelings.
- desdiv 12y ago
  They've already announced plans to roll out the tax "as early as this year": http://www.theglobeandmail.com/report-on-business/international-business/china-moving-quickly-to-roll-out-property-taxes-nationwide/article20294761/ http://www.theglobeandmail.com/report-on-business/internatio...

seanmcdirmid 12y ago

The straight up property tax (per property, no exceptions) will be added at some point. Municipalities can't make so much money by selling land anymore, and the central government doesn't kick back enough tax revenue. Not only that, but they have committed to eventually providing social services to migrants, like you know, schooling for their kids. That has to be paid for someway. But they will definitely hold off for now, a property tax would cause huge devaluations in property prices inflated by the lack of one. But if we get a crash anyways, it will be easy just to add it at the bottom. The question is what is next, with transaction reaching a very low bottom to keep prices from falling, we seem to be in for a long bout of stagnation which will drag down the larger economy even more than if a crash would just happen and we could be over with it.

unimportant 12y ago
Local government and companies have borrowed way too much based on real estate value that a crash would be allowed to happen based on what I have read, as it would have much broader implications than in the US. Rents in Shanghai have remained mostly stagnant from what I've seen for the last 2 years, so it's good for tenants.
- seanmcdirmid 12y ago
  Rents at the high end are completely stagnant, which is why those new apartments aren't being renovated. Not having a property tax leads to hoarding and not putting property to productive use, which screws everyone but the princelings.
desdiv 12y ago
They've already announced plans to roll out the tax "as early as this year": http://www.theglobeandmail.com/report-on-business/international-business/china-moving-quickly-to-roll-out-property-taxes-nationwide/article20294761/ http://www.theglobeandmail.com/report-on-business/internatio...