70 years house ownership recently expires for some old houses in Shanghai, houses will be demolished

[Han Patriot]

Again, property taxes are not unaffordable by any stretch. What I said is the Chinese having more than one house is nothing but your real estate bubble. You are buying up properties in hopes of prices going up. That's the reason the Chinese have more houses/flats than required. Now, you come up with stuff like tax, China has more income than India, stronk et al. Also, not taxing farm income is not unique to China, you had a tax on farm income up until 10 years ago that's strange.

Most Chinese origin people have more than one property, it is a cultural thing. You go to the states, you see the same pattern, you go to Australia it's the same, their money their choice, it is an open market economy, if there is demand there will be supply.

I have never said property taxes are bad, i am just saying China does not need to even use it to get enough money to fund the government since we have a more efficient tax collection system than India. Imagine if we implemented property taxes, our budget would be even bigger than the USA. Farm tax was a legacy of the imperial system, it was stopped to help farmers and to incentivise them to farm. Btw, i am a proponent of property taxes for people owning more than 2 properties.

People also forget one thing, land is only owned for 70 years in China. Yes for most residential houses, the government will most likely renew the lease but for industrial and commercial lots, the government will charge an amount for lease renewal. China does not have private land rights. If there is a need to demolish it, they will do it too. People also forget about the quality of Chinese buildings, apart from some tofu projects, old Chinese buildings made of concrete in the 90s and early 2000s last really long when compared to fibreboard US houses. I am not saying they have quality fittings and finishing or even good taste design, i am talking about structural integrity, these mofos are really solid blocks. I am sure the pre war US brick houses were the same. But so far i have never seen modern Chinese houses made of plaster drywall and fibreboard like the US where you can literally punch a hole in the wall.

 

[Han Patriot]

No way it's going to be free lol.

1) Cost. It's going to be a huge, huge additional fiscal burden never undertaken by any other government. If they can rack up huge debt when they are making off money from land sales (cash inflow), you think they can do a full compensation (cash outflow) in the future? Especially when China will be shrinking demographically in the coming decades where there might be more homes than people?

2) Inequality. Say if some tycoon owns 10 luxury apartments in downtown Shanghai, he can pass them down to his descendants in perpetuity? And with appreciating home prices, taxpayers have to pay his descendants a full CMV compensation of 10 luxury housing in downtown Shanghai every 70 years? His descendants can just collect rent from the new luxury home forked out by taxpayers? Meanwhile the poor and their descendants will be condemned with a much smaller compensation (or even no compensation at all), just because their ancestors did not buy a luxury apartment at low prices in the 1990s?
Effectively it will be a large systemic transfer of wealth from the poor to the rich, and it will be a recipe for disaster.

Any compensation at CMV currently is more like the exception than the norm. The vast majority of housing in China were built fairly recently, so they only have to tackle the problem in a few more decades. There is still a lot of ambiguity.

Their state media (Google Translate):

58同城：70年房屋产权到期后，你的房子还是你的房子吗？

进入3月份,楼市迎来传统的“金三银四”销售旺季,许多房企趁此升级购房优惠举措,希望带动自己的销量增长。值得注意的是,房屋的土地使用权并不是从购房者签合同买房的那一刻开始算起,而是从开发商向国家申请拿到土地的那一刻开始计算。

cn.chinadaily.com.cn

I think they also know it's not possible to give free compensation for everyone, but clarifying it now will probably shake market's confidence and affect prices.

In Singapore, we also have 99-year leases. And the official stance is, yes, the value will go to zero after 99 years. That's how you 'close the loop' and recycle land for future generations. Might not be popular, but necessary.

The China model is based on the Singaporean model but at a larger scale and more chaotic. The Chinese budget is still sustainable now with industrial and corporate taxes. But sooner or later, property taxes will need to be implemented. It is amazing how China survived for so long without property taxes. There will also be inheritance tax too, since the bourgeois class was only a recent phenomenon. China actually only until recently set up a national property registry, and we all know what that is for. Lolol

I am not sure you are ethnic Chinese, but if you were, just remember Chinese if educated are not stupid people especially the onea ruling China but we are not perfect either. Everything is still undee experimental stage and test. We only had a truly market economy for like the past 30 years? I always tell my Chinese comrades, scrutiny is good, bashing is good, China improved so much due to Western bashing.

 

[Mista]

Also lot of people are posting here smugly about property tax as if it is much fairer way for govt to collect taxes.

Who would be smug about paying more taxes lol. The fact is, we do need either some form of property leasehold or property tax if the society is to maintain intergenerational class fairness and equity.

Otherwise you can have a billionaire snapping up 100 properties in a city's downtown and his descendants can leech forever from rent and property appreciation. Without tax or an expiry date to level the economic opportunities, a peasant's descendants can only rent flats from the bourgeois class in perpetuity, just because their great great-grandfather is not rich enough to buy a property.

The China model is based on the Singaporean model but at a larger scale and more chaotic.

Err, not really. Like I said in my earlier post, it's based more on the HK model where land sales revenue is an important revenue for the local government.

70 years house ownership recently expires for some old houses in Shanghai, houses will be demolished

https://www.reuters.com/markets/asia/chinas-local-govts-must-prevent-defuse-debt-risks-economic-daily-2023-07-13/ https://www.nytimes.com/2023/05/10/business/china-property-tax.html In China, where the government owns the land, localities almost never tax homeowners to support services like...

defence.pk

In Singapore, the government can't even touch the revenue collected from land sales according to the constitution. The money goes straight to our SWF to invest. Even if the government wants to spend more without raising taxes, there is little to no incentive for them to raise land premiums.

Land sales revenue is estimated to be around SGD17bil in 2023, more than the revenue collected from GST, but the government can't spend even single cent of it.

 

[beijingwalker]

不用羡慕美国的房子是永久产权，算账之后，中国70年产权更划算​

70 years property tax added up can buy 3 of the same house in US

 

[letsrock]

@Mista Who would be smug about paying more taxes lol. The fact is, we do need either some form of property leasehold or property tax if the society is to maintain intergenerational class fairness and equity.

Otherwise you can have a billionaire snapping up 100 properties in a city's downtown and his descendants can leech forever from rent and property appreciation. Without tax or an expiry date to level the economic opportunities, a peasant's descendants can only rent flats from the bourgeois class in perpetuity, just because their great great-grandfather is not rich enough to buy a property.

This is a position with no ideological or principled basis. but based on a "worry" what will rich or wealthy do. In china the billionaire wont own the property anyway. in other countries the market should work and if it fails politicians will anyway do rent control. This property tax violates both the right to property (fundamental capitalist right) and fair market principles (you pay for the service you get and not because what you aleady own - if you apply property tax logic then a rich guy should pay more for coffee than poor guy)

 

[nang2]

It is some form of tax.

It was the job of the local government. Now all new housing community MUST have housing association.
So the government wash hands of all responsibility and private house owner now have no choice but to pay up.

I am not aware of that. Tell me which state, or county or city has enacted a law that requires all houses to be under some HOA.

 

[Han Patriot]

Who would be smug about paying more taxes lol. The fact is, we do need either some form of property leasehold or property tax if the society is to maintain intergenerational class fairness and equity.

Otherwise you can have a billionaire snapping up 100 properties in a city's downtown and his descendants can leech forever from rent and property appreciation. Without tax or an expiry date to level the economic opportunities, a peasant's descendants can only rent flats from the bourgeois class in perpetuity, just because their great great-grandfather is not rich enough to buy a property.



Err, not really. Like I said in my earlier post, it's based more on the HK model where land sales revenue is an important revenue for the local government.

70 years house ownership recently expires for some old houses in Shanghai, houses will be demolished

https://www.reuters.com/markets/asia/chinas-local-govts-must-prevent-defuse-debt-risks-economic-daily-2023-07-13/ https://www.nytimes.com/2023/05/10/business/china-property-tax.html In China, where the government owns the land, localities almost never tax homeowners to support services like...

defence.pk

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In Singapore, the government can't even touch the revenue collected from land sales according to the constitution. The money goes straight to our SWF to invest. Even if the government wants to spend more without raising taxes, there is little to no incentive for them to raise land premiums.

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Land sales revenue is estimated to be around SGD17bil in 2023, more than the revenue collected from GST, but the government can't spend even single cent of it.

I am not talking about just land sales, i am talking about the governance as a whole, except the farce election part, China is trying fo emulate Singapore. How a one party state can manage profitable SOEs. Even the early city planning in the 90s and 2000s was advised by a fellow Hainanese Singaporean.

Normally, developing countries or newly minted capitalistic countries will use the landsales method to enhance revenue, land taxes in cities at that time were actually too low to even make a difference, now it is different.