China needs a real estate tax to control rising property prices and narrow the gap between rich and poor, Fan Gang, a member of the central bank monetary policy committee, was quoted as saying. Reasons for the delay include resistance from vested interests and a lack of clarity on how a property tax will be handled between the central and local governments, financial media group Caixin on Wednesday cited Fan as saying.
China's home prices rose at the fastest pace on record in November, and dozens of cities have raised the bar to buy a home in an effort to control prices. China has for years mulled an annual property tax, but little progress has been made since a limited tax was implemented in Shanghai and Chongqing in 2011.
"The (property tax) isn't on the State Council's agenda. I don't understand why it can't be done. It's been more than 10 years," Fan said. The State Council is China's cabinet. In November the finance minister at the time said China was actively pushing forward reforms on property taxes, and President Xi Jinping last week mentioned taxes as a way to address speculation in the market. "If China does not introduce a property and capital gains tax, there will be no easing of the gap between China's rich and poor," Fan said, according to Caixin.