BEIJING (Reuters) – China omitted mention of a property tax in its 2021 legislative plan on Monday for a second consecutive year as the government focuses on boosting consumption to cement an economic rebound from the COVID-19 pandemic amid lingering uncertainty.
The topic was also omitted from the government’s work reports in 2020 and 2021 by Premier Li Keqiang at the annual meeting of parliament, which set out the full-year agenda, though property tax legislation is still planned for the future.
“As China’s economic recovery still faces pressure from various uncertainties including the United States’ stimulus and a resurgence of the epidemic, policymakers attach greater importance to the stability of the real estate market,” said Lu Wenxi, chief analyst with property agency Centaline.
“Once there are major tax policy changes, there might be some turbulence.”
China’s property market quickly regained strength last year after the coronavirus crisis, offering much-needed support for an economy that has now almost fully recovered to pre-pandemic levels.
“The reform of the property tax is not so much in line with this year’s theme of expanding domestic demand and stimulating consumption,” said Li Yujia, chief economist at Guangdong Property Policy Research Institute.
“The focus of this year is resolving housing problems in big cities, which is more specific.”
The Chinese government and the National People’s Congress said in 2019 that the country would advance steadily towards the drafting of a property tax, which is widely seen as the most powerful tool to deter speculators.
The property tax legislation is still part of the plan for this term of the Standing Committee of the National People’s Congress, whose tenure ends in 2023, Li said, adding that substantial progress on the issue would be seen in the next two years.
The Chinese government said on Friday in its development plan for 2021-2025 that it would push for the property tax legislation over next five years.
(Reporting by Lusha Zhang and Ryan Woo; Editing by Gareth Jones)