China Real Estate Tax: For Real This Time?

An article discussed who wins and loses from a real estate tax, and who will be most hit by it. Spoiler: people with high leverage and lots of investment properties.

iFeng: 房地产税已成最焦点:谁最害怕 个税也有三大重磅变化
Houses and wages have always been the most concerned topics. Corresponding to real estate tax and personal income tax, it also affects people.

Today, the Ministry of Finance held a press conference and made detailed presentations on the topics of real estate tax and personal income taxation.

For the real estate tax, the Ministry of Finance disclosed six details of the scope of real estate tax collection, tax incentives, and implementation progress. For personal income tax, the Ministry of Finance also described the combination of raising the tax threshold, increasing deductions, and establishing a comprehensive and classified tax system. Three new changes to the tax system.

The real estate tax affects the nerves of the market, especially the friends of Guangshen in the north, and the fear of buying a house is going to be depreciated and it will be stuck. If you don’t buy it, you may be tempted to prepare for the “bottom purchase”. In addition, a tax is a subject of public concern. The monthly salary is 15,000 yuan (5 insurances and 1 gold is deducted). If the threshold is raised to 10,000 yuan, the tax will be reduced by 1,425 yuan, and the tax burden will fall by nearly 80%.

Ministry of Finance reveals six details of real estate tax

Detail 1: The role of real estate tax

The adjustment of income distribution, especially the concentration of personal wealth, plays a role in promoting social equity. At the same time, raise fiscal revenue to meet the needs of the government to provide public services.

Detail 2: Collection of real estate tax

All industrial and commercial housing and individual housing will be taxed according to their assessed value, that is, they are taxed according to the assessed value.

Detail 3: Tax Benefits for Real Estate Tax

In all countries' real estate tax system arrangements, there are some tax benefits. For example, some deductions can be made or certain tax reliefs can be given to some difficult families, low-income families and special disadvantaged groups. Of course, the specific way is not the same, the level is not the same, but there are some tax incentives.

Detail 4: Real estate tax is local tax

Property tax is a local tax and its income is attributed to local governments. Local governments use these revenues to meet expenses such as education, law and order, and other public infrastructure provision.

Detail 5: Set up real estate tax according to China's national conditions

The establishment of real estate tax will refer to the characteristics of the institutional arrangements of international commons. Of course, we will also rationally design our real estate tax system based on China’s national conditions and China’s national conditions. For example, mergers and acquisitions related to some taxes, for example, a reasonable reduction in the construction of real estate transactions, some of the tax burden.

Detail 6: Real estate tax implementation time

The determination of the tax base of real estate tax is relatively complex or very complicated. Therefore, it is necessary to establish a complete tax collection and management model so that the real estate tax can be obtained and the fairness can be obtained.

In accordance with the central government's decision-making and deployment, the Budget Committee of the NPC Standing Committee, the Ministry of Finance and other relevant parties are working hard to draw up and improve the draft real estate tax law. The general idea of ​​real estate tax legislation is the first, fully authorized, step by step. In accordance with such a general idea. At present, it is designing, perfecting, and at the same time conducting argumentation and listening to opinions.

Three new changes in taxes

1. Change 1: Improve the threshold

Increase the tax threshold, and to what extent? The Ministry of Finance stated that it will be determined based on changes in the basic living expenses of residents.

2. Change 2: Increase the special deduction

The personal income tax will increase special deductions. The Ministry of Finance stated that in addition to the education for children and medical care for serious diseases proposed in the “Government Work Report,” the scale and number of the final specific specific deductions will be determined based on actual conditions.

3. Change 3: Establishing a tax system that combines comprehensive and classified taxes

The classification tax system is transformed into a personal income tax system that combines the comprehensive and the classification. Some labor income, such as wages, labor remuneration, royalties, royalties, etc., are combined, and then a basic deduction is made and taxes are collected.

At the press conference, the Ministry of Finance stated that it will conscientiously implement the decision-making and deployment of the central government, accelerate the initiation of tax reform programs, and initiate the revision of personal income tax. All the reform elements will be finalized through the revision of the personal income tax law. Personal income tax is a personal income tax law. After the draft is finalized, it will be submitted to the National People's Congress Standing Committee for review.

Real estate tax levy, who is most afraid?

First-tier cities have a lot of homes

Damage Index ★★★★

According to the principle of “full authorization and step-by-step advancement”, the first line of cities that can launch real estate taxes first is likely to be very promising. For those who have dozens or hundreds of homes in the first-tier cities, it will be the beginning of bad weather. Although it can be passed on to tenants, random price increase will be regulated, and under the new policy, the supply of rental housing in first-tier cities will increase significantly in the next few years. Concentrated selling will occur at that time, which will have an impact on short-term housing prices in first-tier cities.

Third- and fourth-tier cities have a lot of homes

Damage Index ★★★★★

After the real estate tax is implemented in the first- and second-tier cities, the third- and fourth-tier cities will inevitably follow suit. For those who have dozens of houses or hundreds of houses, there will also be concentrated selling. However, the population growth in third and fourth-tier cities is weak, the demand for housing is not as good as that in first-tier cities, and the acceptance is not as good as that in first-tier cities. It is even more difficult to pass. Rentals are passed on to tenants. By then, there may be a round of adjustments in third-tier cities.

Increased leverage and high debt ratio

Damage Index ★★★★★

If the real estate tax is imposed, it will make house prices into a stable period, and will aggravate the stalemate in the market, making it difficult for the house to cash out. This will increase the cost of ownership for real estate speculators with high leverage and high debt ratio. This is undoubtedly a big bad for speculators eager to sell.

Own one or two dwellings

Damage index ★

For ordinary people who own one or two houses, the introduction of real estate tax has almost no effect. Yan Yuejin, director of research at ThinkCentre Research Center, said that more than three homes may be taxed. Taking Shanghai, which has already implemented property taxes as an example, the exemption point is 60 square meters/person. For a family of three, 180 square meters or less will be included in the scope of tax exemption.

How do you and I benefit from the tax reform?

1 Increase the benefit tax threshold

▲Currently implemented seven progressive excess tax rates

For the salaried people with a monthly salary of 15,000 yuan (with 5 insurances and 1 gold deducted), under the current tax rules, taxes are required:

(15000-3500) × 25% - 1005 = 1870 RMB

Assume that the tax threshold is raised to 10,000 yuan, and the seven-level progressive tax rate remains unchanged. The monthly salary of 15,000 yuan (5 insurances and 1 gold deducted) is subject to tax:

(15000-10000)×20%-555= 445

From this point of view, the amount of tax payable was reduced from 1870 yuan to 445 yuan, and the tax burden was reduced by nearly 80%.

2 Benefits increase deductions

At the two national conferences this year, Dong Mingzhu mentioned that since the 1980s, it is now the mainstream population in society, but their children are still very young, and the younger ones may be a little older than juniors. However, children's education costs are not low, such as children in private kindergartens, a monthly average of 3,000 yuan, or even higher. The education cost of tens of thousands of yuan a year is not a small pressure on the average family. If you add a mortgage, it will have an impact on your life.

Ma Guangyuan also mentioned that it is of course a good thing to increase the exemption of personal income tax. However, the issue of the largest individual tax in China is definitely not an exemption, but the design of the tax system itself is unreasonable. Since China implements a tax classification system rather than a comprehensive tax system, this type of tax system does not consider the actual burden of households on the one hand and pays attention to wages on the other. As a result, individual taxes have almost become a payroll tax, and the poor have become the main force of taxation. . Without changing this, merely raising the amount of exemption does not make much sense.

Therefore, the fundamental change in this tax reform is that it does not simply raise the tax threshold, but adds deductions and converts the tax classification system into a personal income tax system that combines the comprehensive and the taxonomic classification.

Hong Kong has become more mature in the collection of personal income tax. Prior to this, brokerage Chinese reporters had calculated that for mainland wage earners and Hong Kong people, the same situation and salary, the mainland tax payment is five times that of Hong Kong. Details can be clicked on "Prime sent four spree, the most weight is a tax, the first increase" deductions! " It is no longer necessary for the Mainland to receive four times more taxes than Hong Kong.

Let’s take a look at their deductions:

Exemptions include children, dependent parents/grandparents, dependent siblings, disabled dependants, etc. Judging from the 2015/2016 salaries tax, the tax allowance for each child in the family is HK$100,000 and an additional tax allowance of HK$100,000 (or 200,000) can be added in the child’s birth year;

Deductions include personal learning expenses, home loan interest, approved charitable donations, elderly residential care expenses, contributions to approved retirement plans, etc., but each has a cap. According to the 2015/2016 salary tax, the personal deduction limit for personal education is HK$80,000, and the ceiling for interest on home loans is HK$100,000.

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