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China's property market chilled last year as Beijing's
deleveraging campaign triggered a liquidity crisis at some major
property developers, resulting in bond defaults and projects
being shelved or left unfinished.
Overall demand remains sluggish, though a slew of measures have
been put in place to revive buying interest.
New home prices stalled in February after edging up a month
earlier, official data on Wednesday showed.
The implementation of a property tax faces challenges, including
macroeconomic pressures and downward pressure on the real estate
market, said Yan Yuejin, research director of Shanghai-based
E-house China Research and Development.
"This move is bound to reduce home buyers' concerns," said Yan,
adding it was also favourable for real estate companies.
Chinese vice premier Liu He on Wednesday urged government bodies
to roll out market-friendly policies and "cautiously" introduce
measures that risk hurting markets. He also pledged to tackle
risks in the property sector.
China will implement city-specific policies to promote the
healthy development of the property sector, Premier Li Keqiang
told the annual meeting of parliament earlier in March.
In 2011, China launched a property tax pilot in Shanghai and
Chongqing, and the idea of rolling out a new trial has been
resisted by stakeholders including local governments that rely
heavily on land sales as a source of financing.
In October, the top decision-making body of parliament said it
would roll out a pilot real estate tax in some regions, but did
not identify the regions or give other details.
Most analysts were expecting the property tax to be delayed,
according to a Reuters poll last month.
At the annual meeting of parliament earlier this month, China
omitted a potential property tax in its 2022 legislative plan
for the third consecutive year.
(Reporting by Kevin Yao, Liangping Gao and Beijing newsroom;
Editing by Louise Heavens and Mark Potter)
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