China stands alone among developed economies for its lack of property tax, a status that it has maintained over the years despite being the second largest economy in the world. However, with the nation’s largest real estate giant Evergrande tipping on the edge of a default crisis, the government may finally be compelled to cast off this unique position and to finally impose one.
In early October this year, the Standing Committee of the National People’s Congress (NPC), China’s top legislative body, decided to authorize a five-year property tax pilot program in selected cities such as Shenzhen, Hangzhou, and Hainan. This economic move is of great significance in regulating China’s real estate sector, but the stakes are high.