Notice of Shanghai Municipal People¡¯s Government on Printing and Distributing the Interim Procedures of Shanghai Municipality on Pilot Collection of Property Tax on a Selected Part of Personal Housing
(January 27, 2011)
SMPG G [2011] No. 3
Attention: all District and County People¡¯s Governments and all relevant Commissions, Offices and Bureaus (Administrations) of the Municipal People¡¯s Government:
In accordance with the spirit of the 136th Routine Meeting of the State Council, the Municipal People¡¯s Government has decided to initiate pilot collection of property tax on a selected part of personal housing in this Municipality from January 28, 2011. We hereby print and distribute to you the Interim Procedures of Shanghai Municipality on Pilot Collection of Property Tax on a Selected Part of Personal Housing, and request you to implement them conscientiously.
Property tax reform is an important action taken at the 5th Plenary Session of the 17th Central Committee of CPC and an important constituent of our country¡¯s tax system reform during the Twelfth Five-Year Plan period. All districts/county and departments shall attach great importance thereto, work meticulously and cooperate closely, so as to ensure the smooth progress of pilot collection of property tax on a selected part of personal housing in this Municipality.
Interim Procedures of Shanghai Municipality on Pilot Collection of
Property Tax on a Selected Part of Personal Housing
With a view to further improving the property tax system, adjusting residents¡¯ income distribution rationally, guiding housing consumption to the correct direction, and allocating real estate resources effectively, the Municipal People¡¯s Government has decided to initiate pilot collection of property tax on a selected part of personal housing in accordance with the spirit of the 136th Routine Meeting of the State Council. These Interim Procedures are hereby formulated in the light of the actual circumstances of this Municipality.
1. Scope of the Pilot Exercise
The scope of the pilot exercise is the administrative area of this Municipality.
2. Object of Collection
The object of collection shall be those houses (including secondhand houses in stock and newly-built commercial houses, similarly hereinafter) newly purchased in this Municipality by households of permanent residents of this Municipality as their second house or even more since the effective date of these Interim Procedures, as well as those houses newly purchased in this Municipality by households of non-permanent residents of this Municipality since the said date (both of which are collectively referred to as ¡°taxable houses¡± hereinafter).
Relevant provisions of the State on property tax on personal housing shall apply to personal housing other than the above-mentioned objects of collection.
The time for newly purchasing a house shall be the date as filed on the house purchase contract website.
The number of units of housing that a household of residents (including husband and wife and their minor(s), similarly hereinafter) owns shall be established on the basis of detailed information on its ownership of housing in this Municipality.
3. Taxpayers
Taxpayers shall be the property owners of taxable houses.
In case the property owner is a minor, his/her legal guardian shall pay the tax on his/her behalf.
4. Basis for Tax Assessment
The basis for tax assessment is the assessed value determined with reference to the real estate market price of a taxable house, and such an assessed value shall be reassessed at regular intervals as provided. In the early stage of the pilot collection, the market transfer price of a taxable house shall tentatively serve as the basis for tax assessment.
Property tax shall be calculated and paid tentatively on the basis of 70% of the market transfer price of a taxable house.
5. Applicable Tax Rate
The applicable tax rate is tentatively set at 0.6%.
If the market transfer price per square meter of a taxable house is lower than twice (or twice) the average sales price of newly-built commercial housing in this Municipality in the previous year, the tax rate shall tentatively be reduced to 0.4%.
The above-mentioned average sales price of newly-built commercial housing in this Municipality in the previous year shall be publicized by the Municipal Statistics Bureau each year.
6. Tax Reduction and Exemption
(1) If a household of permanent residents of this Municipality newly purchases a house in this Municipality as its second house or even more, and the aggregated per capita total personal housing area (or housing floor space, similarly hereinafter) of the household is not more than 60 square meters (that is, the tax-exempt housing area, 60 square meters included), the property tax on the house newly purchased shall be exempted tentatively; if the per capita housing area is more than 60 square meters, property tax on the excess area of the newly-purchased house shall be calculated and collected as provided in these Interim Procedures.
The aggregated total housing area of a household is the sum of the area of the house newly purchased by the said household and the area of its other house(s).
If a household of permanent residents of this Municipality has adult children who have no housing of their own and are still living with their parent(s), such children may be included when calculating the tax-exempt housing area for that family upon verification; as for households with other special circumstances, procedures for calculating tax-exempt housing area shall be separately formulated.
(2) If a household of permanent residents of this Municipality sells the only house it originally owns within one year after it newly purchases a house, the property tax calculated and collected on its newly purchased house as provided in these Interim Procedures may be refunded.
(3) If a child of a household of permanent residents of this Municipality purchases a house for the first time after reaching adulthood due to the need of marriage, and such a house is the only house of the household of the said adult child, property tax thereon shall be exempted tentatively.
(4) Should a high-caliber talent or an urgently-needed talent in a key industry who is introduced according to the relevant State or municipal provisions and works and lives in this Municipality as a residence permit holder of this Municipality newly purchase a house in this Municipality as the only house of his/her household, property tax thereon shall be exempted tentatively.
(5) Should a house purchaser who has been a residence permit holder of this Municipality for three years or more and works and lives in this Municipality newly purchase a house as the only house of his/her household, property tax thereon shall be exempted tentatively; if the house purchaser is a residence permit holder of this Municipality for less than three years, the property tax on the above-mentioned house shall first be calculated and collected as provided in these Interim Procedures, and such property tax collected on the above-mentioned house may be refunded when he/she is a residence permit holder of this Municipality for three years or more and works and lives in this Municipality.
(6) Other house on which property tax needs to be reduced or exempted shall be determined by the Municipal People¡¯s Government.
7. Use of Revenue
The revenue from pilot collection of property tax shall be used as expenditures on indemnificatory house construction.
8. Collection Administration
(1) Property tax shall be collected by the local tax department of the place where the taxable house is located.
(2) Property tax shall be calculated from the month after the taxpayer obtains the property ownership of the taxable house and collected on an annual basis, and if the duration of ownership is less than one year, the property tax on such a taxable house shall be collected on a monthly basis.
(3) For any newly purchased house, the purchaser shall, as required by the local tax department, provide on his own initiative information on his/her family members and the result of relevant information search on their ownership of houses in this Municipality issued by the Municipal Information Center of Housing Status. If needed, the local tax department shall, jointly with relevant departments, examine and verify whether property tax shall be paid for the newly purchased house and notify the house purchaser of the verification result in writing. If the property ownership of a taxable house is transferred, the original property owner shall pay off the property tax.
The parties to the transaction shall, against the written verification result issued by the local tax department, complete real estate registration with the registration agency; in case of failure to provide such a result, the registration agency may not perform the real estate registration.
(4) The taxpayer shall make a tax declaration and provide relevant information truthfully as required, and shall bear legal accountability for the information provided.
If the taxpayer fails to make a tax declaration within a prescribed time limit, the local tax department shall serve him notice to pay the tax and the overdue penalty therefore, and impose fines thereon as provided.
(5) Property tax collection on taxable houses shall be administered in accordance with relevant provisions of the Law of the People¡¯s Republic of China on the Administration of Tax Collection, as well as with these Interim Procedures. Specific procedures of collection administration shall be formulated by the Municipal Administration of Local Taxation.
9. Departmental Functions and Duties
(1) Establishing working mechanisms
The Municipal People¡¯s Government shall set up a working agency for pilot property tax made up of the municipal departments of finance, local taxation, housing support and building administration, construction and communications, planning, land and resources, public security, civil affairs, human resources and social security, and statistics, and establish and optimize the working mechanisms, so as to push forward the pilot property tax work.
(2) Coordinating collection administration
The municipal departments of housing support and building administration, construction and communications, planning, land and resources, finance, public security, civil affairs, human resources and social security, and statistics shall cooperate actively with the local tax departments in establishing a control and regulating mechanism for property tax collection on taxable houses, provide such information as needed by the pilot collection of property tax on a selected part of personal housing in this Municipality, and jointly do well the verification of taxable houses.
(3) Realizing information sharing
The municipal departments of local taxation, housing support and building administration, construction and communications, planning, land and resources, finance, public security, civil affairs, human resources and social security, and statistics shall establish a citywide unified real estate information management platform to realize the sharing of information in the personal housing information database.
10. Assessment Mechanism
The assessment of property tax base shall be jointly organized and implemented by the municipal departments of local taxation, finance, housing support and building administration, and planning, land and resources under the unified leadership of the Municipal People¡¯s Government.
11. Other Matters
Other matters that are not covered in these Interim Procedures shall be dealt with in accordance with relevant provisions of the State and this Municipality.
Specific provisions on the pilot collection of property tax on a selected part of personal housing in this Municipality shall be formulated by the Municipal Finance Bureau, the Municipal Administration of Local Taxation, and the Municipal Housing Support and Building Administration and submitted to the Municipal People¡¯s Government for approval before their promulgation for implementation.
These Interim Procedures shall be effective as of January 28, 2011.
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