Explain property tax plan

Domestic media were quick to read a warning into the report that the tax authorities are planning to expand simulated property tax collection from pilot cities to the whole country.

Though it is far from clear when and how such a realty tax will be imposed, some domestic experts have already interpreted the expected move as fresh evidence that the government is tightening control over house prices with taxation.

Tough talk that the Chinese authorities made at the end of last year against excessive rises in housing prices, particularly in certain cities, has considerably boosted public expectations that the government will step in to cool the overheated property market. Since the property tax will generally make it more expensive to own a house, its introduction, in a sense, can be regarded as a measure to discourage the speculative property transactions that have largely fueled property bubbles.