Improve the real estate tax system, Increasing government fixed income and curbing housing speculation are common international practices and an important choice for my country’s fiscal and tax reform. Real Estate There are many doubts caused by tax. Whether it can effectively restrain the rapid rise of housing prices and truly promote the “depletion of funds” Xiangshi”? This needs to be taken seriously and considered.
The doubts are understandable, but careful analysis can lead to the conclusion that the overall risk is controllable. The real estate tax may have a certain impact on the housing market in the short term, but my country’s current high down payment ratio can give financial institutions a sufficient safety margin in terms of mortgage asset quality; and the real estate tax can help reduce the concentration of social funds in the real estate industry, which in turn will It will reduce the overall real estate financial leverage, guide funds to “move from virtual to real”, and improve the efficiency of financial services to the real economy.
Real estate tax can increase housing transaction and holding costs and regulate real estate investment returns. Therefore, it is a common practice in various countries to use tax leverage to curb speculation in the housing market. It is undeniable that high housing prices may lose support due to the suppression of speculation, and price corrections may occur, which will affect commercialbanks housing loans Asset quality. However, it should be noted that my country’s current minimum down payment ratio of 20% for personal housing loans (minimum 30% in hotspot cities) and higher down payment ratios for second-home loans can theoretically bear at least a 20% drop in overall housing prices. Moreover, the loan amount of second-hand houses is calculated based on the appraised price rather than the market price. In theory, second-hand house loans can bear the price drop of less than 40%.
Judging from past experience, Hong Kong housing prices have halved between 1997 and 2003, but the mortgage loan delinquency rate of Hong Kong commercial banks has never exceeded 1.5%. The sharp rise in housing prices in my country’s hot cities since 2016 may be driven more by investment speculation, but the minimum down payment ratio of 40% for second-home loans in hot cities can fully offset the risk of housing price corrections. The real risk of default is in the illegal down payment loan business of real estate agencies. However, the scale of down payment loans in the tens or tens of billions is not the same as the nearly 20 trillion yuan in personal home purchase loan balances nationwide. As of the end of December 2016, the ratio of the balance of personal home purchase loans to the balance of household deposits in my country was 32.02%, and the overall leverage of home loans was within a controllable range. Taken together, the impact of real estate taxes on mortgage asset quality is generally controllable.
Real estate tax will also inevitably reduce the accumulation of social funds in the real estate industry and promote funds to “move from empty to real”. In 2016, the increase in RMB real estate loans in my country accounted for approximately 44.8% of the increase in various loans, while the increase in personal home purchase loans accounted for 39.21% of the increase in various loans. As of the end of December 2016, the national real estate loan balance accounted for approximately 1/4 of all loan balances. In addition to real estate loans on bank balance sheets, social funds have also entered the real estate industry in large quantities through entrusted loans, trust loans, bonds, stock issuance, etc., pushing up real estate financial leverage. Suppressing market speculation through real estate taxes will effectively reduce real estate financial leverage. At the same time, as housing investment income falls, the enthusiasm of social funds to invest in the real estate industry will inevitably decrease, and the enthusiasm of investing in the physical manufacturing industry will increase significantly. Then the work of guiding social funds to “shift from virtual to real” will be completed naturally.
The Central Economic Work Conference proposed, “Houses are for living in, not for speculation.” Not long ago, the State Council issued the “About Innovating the Government” “Guiding Opinions on Resource Allocation Methods” points out that “regions are supported to explore and innovate in aspects such as real estate tax, pension and medical security.” Pilot cities need to carefully formulate detailed rules, conduct real estate tax collection pilots with comprehensive consideration of the quality of local financial assets, fully consider market reactions, prepare risk response plans, and explore and accumulate experience and lessons for the comprehensive implementation of real estate taxes across the country. .
(Original title: Real estate tax beneficial funds “from virtual to real”)
