It seems China has heard what the experts said. A few days back I had told you that China was nearing a real estate bubble burst and might face the same situation which Japan faced in the 80s. Now China is making efforts to control the property prices by charging land tax from real estate developers in order to dissipate the heat in the real estate market in country. Let me tell you that this tax is being implemented again after a gap of more than ten years.
The value of the tax would be thirty to sixty percent of the real estate developers’ net profit from the real estate deals. The tax will be implemented from the 1st February itself. It was back in 1993 when the tax was suspended due to recession in the real estate market.
This decision of the government clearly states that it will continue with its macro control over the real estate sector. Some say it will dampen investment in the sector but to me it seems to be a welcome step because this will help in preventing a real estate bubble in the country and save it from another disaster similar to what Japan had faced. The prices had gone past the roof and time had come to bring the prices under control.
Via eastday
