海角大神

China鈥檚 first-ever property taxes, introduced this week, are unlikely to curb skyrocketing home prices, industry experts here warn, as pent-up demand from young middle class couples continues to boom.

Two of China鈥檚 fastest-growing cities, Shanghai and the western megalopolis of Chongqing, announced Thursday they would impose taxes on high-end properties, in pilot schemes that other Chinese cities are expected to follow.

The long-awaited moves came one day after Beijing raised the minimum down payment for second-home buyers to 60 percent of the purchase price, up from 50 percent, in another effort to rein in property prices.

The government is anxious to cool China鈥檚 red-hot property market, fearing a bubble that could wreak havoc with the economy if it burst, and worrying about antagonizing young first-time buyers, many of whom are being priced out of the market.

House prices in Beijing have risen 250 percent over the past four years, according to a report by the independent Livable City Research Institute in Hangzhou.

The new trial taxes, however, will have 鈥渁 relatively minimal impact on prices,鈥� says Michael Klibaner, head of China research at Jones Lang LaSalle, a leading real estate company. 鈥淭he vast majority of buyers are owner-occupiers鈥� of moderately priced apartments that will not be subject to taxes, he points out.

Shanghai will levy an annual 0.6 percent tax on second homes, while Chongqing will charge between 0.5 percent and 1.2 percent on all residential property, depending on its value.

Those rates are too low to deter speculative buyers of multiple homes, warns Ren Xianfang, a property analyst at HIS Global Insight, a macro-economic consulting firm in Beijing. 鈥淚f they care they will pass those higher costs on to tenants,鈥� she predicts, 鈥渙r they are leaving the properties empty which means they don鈥檛 care whatever the tax.鈥�

With Shanghai鈥檚 stock market falling, and bank interest rates lower than inflation, Ms. Ren says there are no alternatives to property for investors seeking a profit. 鈥淭he market fundamentals have not changed,鈥� she argues. 鈥淒emand and supply are imbalanced.鈥�

The new taxes do, however, point to a major shift in the way Chinese cities will raise tax revenue in the future, suggests Mr. Klibaner. Currently they make a large share of their income by selling land to developers, but 鈥渢here is a finite amount of land use rights that can be sold,鈥� he says. 鈥淐hina needs to move to a more regular form of revenue generation鈥� such as annual property taxes.

It will be a long time before China has the rules, regulations, land registries, and other infrastructure needed to impose US-style taxes based on assessed property values, Klibaner says, 鈥渂ut this is the first step in the process.鈥�