Real estate tax in urban China

Since its foundation in 1949, the People's Republic of China (PRC) has adop ted several contrasting policies to address the urban housing problem. Amon g them have been changes in real estate tax law. The first real estate tax laws in the PRC were promulgated in January 1950. Amended several times, th ey became ineffective after 1973. In September 1986, the State Council prom ulgated a new real estate tax law affecting all urban properties. According to this new law, real estate taxes are to be levied on owners, so that mos t real estate taxes have been paid by enterprises rather than households. H owever, with the recent drive to privatize housing in urban China, property rights are being transferred from public to private ownership, and in conj unction with real estate taxes, this is producing undesired inequalities. T his paper investigates the development of real estate taxation, examines th e role of property tax in the ongoing housing reform, and recommends change s in real estate taxes that would better achieve the government's egalitari an goals. (JEL H20, R31).