Real estate tax is an internationally accepted tax. Real estate taxes in developed economies are mostly levied ad valorem. The taxable value can be divided into virtual rent and appraised value. The taxation scope includes land or (and) buildings on the ground, and the main function of real estate tax is to provide local governments with public fiscal revenues. Tax revenues are used to improve local public service levels and adjust income distribution in terms of tax rates or tax incentives. In terms of housing price control, real estate taxes have a limited effect.
The effect of real estate tax
Singapore and Hong Kong, China levy real estate taxes based on virtual rents, and the income is mainly used for municipal expenses to improve the level of community public services. From the perspective of fiscal contribution, real estate tax is more important to Singapore; from the perspective of income distribution adjustment, Singapore uses an excessively progressive tax rate to adjust, and the effect is better than that of Hong Kong, China; From the perspective of house price control, real estate tax has limited effect on the two economies.
1. Singapore imposes property tax
The expropriation scope includes HDB flats, private houses, EC apartments (Executive Condominium, executive condominiums) and all land. The tax object is the owner of the real property. The tax bases for houses and land are different. Among them, the housing tax base is the annual value of the property, that is, the market rent for one year of renting out comparable properties, which is assessed by the tax office once a year; the land tax base is the market value.
The real estate tax rate adopts an excess progressive system. The annual value of self-occupied houses is exempted within S$8,000, and the excess part is cumulatively progressive between 4%-16%; rented or vacant HDB flats, apartments and other non-self-occupied houses are subject to a five-tier progressive tax rate, no exemption The tax rate is 10% if the annual value is less than S$30,000, and 12%-20% for more than S$30,000. The land tax rate is 5%.
Tax effect: real estate tax is an important source of taxation in Singapore. In 2020, real estate tax revenue will account for 6.25% of total tax revenue and 4.08% of budget fiscal revenue; tax revenue is mainly used to promote Singapore’s development, including infrastructure construction, education, and medical care. , Security and entertainment facilities, etc., are conducive to increasing the value of assets; implementing progressively differentiated tax rates in terms of tax rates, rationally adjusting the income distribution of residents, implementing deductions and exemptions for national citizens and first houses, and implementing higher progressive tax rates for private residences. It also uses stamp duty, additional stamp duty and income tax to curb real estate speculation; the impact on housing prices is limited, and real estate tax is not the main method used by the Singapore government to regulate housing prices. It is often used at the same time as mortgage repayments and stamp duty adjustments.
2. Hong Kong, China collects rates and land rent
The taxation scope of rates includes land and housing, government properties, consulates and other public facilities are exempted. Tax objects include all those who rent, hold or occupy properties. If the land and building belong to the same owner, rates will be levied together; if they belong to different owners, they will be taxed separately. The taxation scope of land rent is land, and the tax object is land contract owners.
The tax base of rates is the rateable value, which refers to the annual rent that is assumed to be available on the market on an annual basis, and the tax rate is 5%. The annual land rent is divided into two types: land rent and land tax. The land rent is the "actual annual rent system", and the taxable scope is the property in the New Territories and New Kowloon (north of Boundary Street), or it was approved on or after May 27, 1985 (the effective date of the Sino-British Joint Declaration). Land lease owners of Hong Kong Island and Kowloon properties whose land leases have been renewed. The tax base is the rateable value, and the tax rate is 3%. Land tax is the "nominal annual rent system", and the taxable scope is for properties on Hong Kong Island and Kowloon that have been granted land leases before May 27, 1985, or land owned by indigenous villagers in the original villages of the New Territories or qualified ancestral villages Contract owner. The tax base is the rateable value of the property on the day of renewal, and the tax rate is 3%.
Tax effect: Rates and land rents have limited contribution to Hong Kong's finances. In 2016, rates and property taxes in the holding link totaled HK$24.6 billion, accounting for 3% of fiscal revenue. Tax revenues were mainly used for municipal service expenditures. Taxation still cannot solve the problem of high housing prices in Hong Kong. From 1986 to 2017, the average annual price of private housing on Hong Kong Island, Kowloon, and the New Territories increased by 10%, 10%, and 9% annually. The ratio of absolute housing prices to housing prices in Hong Kong ranks among the top international cities.
The United States, Japan, Germany, and the United Kingdom levy real estate taxes at assessed value. The tax is used to provide local infrastructure construction, security and fire protection and other public products, improve public service levels, and add value to regional assets. It is an important tax source for local governments in various countries. From the perspective of income distribution, the United States uses real estate tax deductions from individual taxes, Japan exempts low-value real estate, and Germany and the United Kingdom use differentiated taxation methods, which have a certain income adjustment effect; from the perspective of house price control, real estate tax is very early The levy was launched, but the impact on the market trend was relatively weak.
1. The United States levies real estate taxes
The scope of expropriation includes land and houses, which are usually expropriated by the county government and then transferred to the corresponding government departments. The tax object is the holder of real property. The tax base is the appraised value. Usually the local tax department sets up two parallel agencies at the same time-the tax appraisal office and the tax commissioner's office. The former is responsible for the value appraisal of each piece of real estate, and the latter calculates the taxable amount and collects it based on the appraised value and deduction clauses. .
The actual tax rate is mostly in the range of 0.27%-2.4%. Some states do not levy the assessed value in full, but set an assessment rate to differentiate the actual tax rate of different types of real estate (equal to the nominal tax rate * assessment rate). Among them, the nominal tax rate "determines income based on expenditure", the local government determines the required real estate tax revenue based on revenue and expenditure, and then determines the nominal tax rate for the current year based on the total estimated value of real estate in the region and the evaluation rate.
Tax effect: Real estate tax is the main tax and an important source of income for local governments in the United States. Real estate tax accounts for more than 70% of local government tax revenue, accounting for 1/4 of total revenue; tax revenue is mainly used for local education, medical and health, Public security, road transportation and other public services can help increase community value. In terms of tax incentives, state and local real estate taxes paid by residents for their own houses can be deducted from taxable income when calculating federal personal income taxes. A certain degree of income distribution adjustment effect; but real estate tax has little effect on regulating housing prices. The average annual growth rate of the nominal house price index from 1946 to 1999 was 5.0%, and the market performance was relatively moderate. The average annual growth rate of the nominal house price index from 2000 to 2005 was as high as 10.6%. , Overheated market transactions and skyrocketing housing prices.
2. Japan levies fixed asset and city planning tax
Fixed asset and city planning Tax is the collective name of fixed asset tax and urban planning tax. Because the collection department, the scope of collection and the tax object are the same, the two are levied uniformly. The scope of taxation includes all real estate. The tax object is the real estate owner on January 1 of each year.
The tax base is the assessed value. The land part is about 70% of the public land price of the previous year. The housing part is assessed by the local government every 3 years with reference to the reconstruction cost. Among them, the tax base of the land part depends on the burden rate (previous year's tax base/this year's tax base). If the burden rate is greater than or equal to 100%, that is, the land price drops, the tax base of the current year will be used directly; if the burden rate is less than 100%, That is, if the land price rises, the tax base for this year will be adjusted according to the increase. The tax rate is different, the fixed asset tax is 1.4%, and the urban planning tax is between 0.2-0.3%.
Tax effect: fixed asset and city planning tax is an important source of local government tax. In 2016, fixed asset and city planning tax totaled 8.4 trillion yen, accounting for 40% of municipal government tax revenue and 22% of local government tax revenue; tax revenue was used for local infrastructure construction And repairs, especially the urban planning tax, is to raise urban construction and other expenses. The tax is used locally, which is conducive to improving the level of community public services and bringing asset premiums; in terms of tax incentives, low-value real estate is exempted. Taking into account social fairness and income adjustment; the capital tax has a limited impact on land prices. Japan introduced a city planning tax in 1940 and a fixed asset tax in 1950. From 1955 to 1974, the national urban land price index increased by 28 times, and the six major cities increased by 34 times. 1986 -In 1990, the land price index of the country and the six major cities increased by an average of 8.3% and 20.6% annually.
3. Germany only levies land tax
The taxation scope is all land, and public land is exempted. The tax object is the land owner. The tax base is the appraised value, referring to the historical appraisal standard. The appraisal standard was introduced in 1964 in West Germany and 1935 in East Germany. Due to the early introduction, the taxable value is much lower than the market value.
Actual tax rate = base tax rate * levy rate. Among them, the benchmark tax rate is set by the federal government, and East and West Germany are different. The benchmark land tax rate in East Germany is between 0.5% and 1%, and that in West Germany is between 0.26% and 0.6%. Different land types have different tax rates. The check rate is determined by each city government based on fiscal expenditures, and there is no upper limit. The minimum is 150%, and the high is even more than 1000%.
Tax effect: Land tax is an important source of tax revenue for German towns and villages. In 2017, it contributed 14 billion euros in tax revenue, accounting for 14.5% of township tax revenues; tax revenues are used for local municipal service expenditures for fixed income, and local governments set according to their own needs Tax targets are set to improve the quality of regional public services and increase the value of assets in the region; set differentiated tax rates, the higher the land value, the higher the tax rate, which has a certain income distribution adjustment effect; the land tax is only an adjustment for the long-term stability of German housing prices Factors have limited impact on housing prices. The average annual growth rate of the nominal housing price index from 1970 to 2017 was only 1.8%. The fundamental reason was the sound monetary and financial policies.
4. The UK levies municipal taxes
The scope of taxation is housing. Exemptions are exempted for houses where only full-time students or minors live, dormitories for the armed forces, vacant houses left by bankrupts, and vacant houses owned by charitable organizations. The tax object is the actual user of the house over 18 years old. The tax base is the appraised value of the house. England, Scotland and Northern Ireland divided the value of houses into eight levels of AH on April 1, 1991. Wales was divided into nine levels of AI according to the value of houses in 2003. Subsequent houses were classified according to the prices of these two base periods. .
The tax rate is based on D-class residential buildings, and a fixed amount of taxation is implemented, and the tax amount is progressive. A fixed tax is implemented for each level of A-H (or I), and level D is the benchmark tax base. The tax amount of other levels is equal to the tax amount of D-level residences multiplied by the corresponding tax multiplier. The higher the house price, the tax multiplier will increase accordingly. in. The tax amount of D-class residential buildings is determined by the local government in accordance with the fiscal budget of this year.
Tax effect: municipal tax is the main tax of local government. In fiscal 2016, municipal tax revenue in England accounted for 43% of local government's fiscal revenue and 16% of local government's total fiscal revenue; tax revenue was used by local municipalities to provide residents with public Products that increase the value of local assets can also reduce the cost of taxation. The UK also adopts the principle of “determining income by expenditure” by local governments, and determines the benchmark tax amount by itself. The higher the value of the house, the higher the tax amount, which can achieve a certain The role of income distribution regulation; municipal taxes have little effect on housing prices. The UK has levied real estate taxes since the middle and late 17th century. The municipal tax was formally levied in 1993, but housing prices continued to rise. The nominal housing price index rose by 888 times from 1917 to 2017. The average annual growth rate is 7%.
