A recent report stating that the Beijing Municipal Government has submitted a request to the State Administration of Taxation (SAT) to start levying property tax has again become the focus of public interest. But later an unnamed SAT official refuted the report, stating that property taxes are not going to be levied in Beijing this June.

The Guangzhou Daily cited another unnamed SAT official, stating that the pilot program concerning "virtual property" in 10 provinces and cities including Beijing, Shenzhen, Liaoning, Jiangsu and Tianjin has been "misunderstood." He also added that property taxes are not likely to be levied for at least two more years.

"At present, real estate management department networks, finance and taxation administrations are not well connected. They are not able to share information, how could they cooperate to levy the property tax?" the official stated, adding that levying property tax involves joint efforts from different agencies.

Beginning in 2003, the State Administration of Taxation picked 10 provinces and cities, including Beijing, Shenzhen, Dalian, Jiangsu and Chongqing, to levy "virtual real estate taxes": this actually means that no money will be collected. The SAT official said that the tax designated now as the "property tax" still has no official name.

"The purpose of tax reform in the real estate sector is first to unite the different taxes, such as housing property tax, urban real estate tax and land-use tax. Another reason is to make the assessed value of the real estate property as the basis for tax assessment in order to solve the unreasonable basis of tax assessment in the real estate tax system," the official said.

(China.org.cn by Zhang Yunxing, February 14, 2008)