In the latest move to promote the construction and sale of small
apartments in the booming real estate market China is considering
levying a tax on the building of big apartments.
According to Liu Zhifeng, vice- minister of construction, the
ministries of construction and finance and the State Administration
of Taxation are jointly studying the feasibility of levying a tax
on owners of large homes including the imposition of the
long-disputed property tax.
"After the new tax is implemented people buying large houses
will also have to pay for their usage," Liu said over the weekend
in an address to an awards ceremony for small homes designs.
He said the new tax was targeted at discouraging people from
buying big houses. "Just like in the auto market where consumers
capable of buying an expensive car may not be able to afford the
fees involved in maintaining that car some home buyers might give
up the idea of buying big houses when taking into consideration the
usage fees," Liu said.
In addition to the levy on big homes the country was also
planning to award designers of small homes, Liu said.
Normally design fees are charged in accordance with the size of
the house. Designing small houses is more complicated and less
profitable.?
He said the country's current real estate market lacks
small-sized houses for buyers. "A house less than 90 square meters
should be the mainstream in the real estate market," Liu said.
He said increasing the supply of small and affordable houses was
the only way to solve the country's dilemma of a huge population
and insufficient land resources.
A survey by the ministry in April shows that the average size of
a house for sale in 40 medium-and-large-sized cities is 113 square
meters. In Beijing, it's 143.9 square meters.
(China Daily December 18, 2006)
