helps clear market
By Zhu Shaobin
China’s new property registration rules, designed to unify the register and protect owners, could have dramatic effects of the real estate market by bringing more transparency.
New rules covering collective ownership of land, ownership of buildings and forest, contracted land management rights and rights of use, will take effect on March 1, the State Council announced on Monday of December 22. The Ministry of Land and Resources will lead and supervise registration.
Segregated registration by different government departments was inefficient, bringing disorder and risk. The unified system will confirm ownership and reduce overlap between government agencies, said Wei Lihua, a ministry official.
“The system is in accord with the 2007 Property Law, ensures the security of transactions and protect owners,” Wei said.
Information from housing, agriculture, forestry, and maritime authorities will be shared and the State Council has urged all departments to contribute relevant information.
Registration will be electronic or in print and kept permanently. Electronic versions shall be backed up regularly.
The new registration system could pave the way for property tax.
Zhang Dawei, an analyst at Centaline Property, a real estate agency, told Xinhua that some Chinese cities are seeing more luxury apartments for sale as the registration system moves forward. Speculative investment in the property sector might flow into other sectors on expectation of a property tax raising the costs of holding property assets.
As land becomes more scarce, traditional revenue through land sales by local governments will become difficult to sustain. “In such circumstances, a property tax will become inevitable, but only after a unified registration system is in place,” said Hu Jinghui, vice president of China’s major real estate agency 5i5j.com.
“The data collected through the system will allow new taxes, such as a property tax and an inheritance tax,” Hu said.
Registration will, to some extent, help anti-graft efforts. Massive investment in property is often a sign of illegal gains through abuse of power.
“Registration will help us know exactly how many properties are there; how many people own homes and how many do not,” said Li Yang, vice president of the Chinese Academy of Social Sciences, but the effect on property prices needs to be watched.
Hu Jinghui believes that many factors affect prices, including supply and demand and credit policies. He sees registration as just one of the indirect, long-term elements influencing prices.