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China property
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Shanghai’s multiple-home owners look to offload units as threat of higher property tax looms

  • News of plans to enact a property tax in selected regions has prompted speculation that the existing levies in Shanghai and Chongqing may be raised
  • Faced with that possibility, many owners of more than one residential property are looking to offload units

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Residential buildings in the Century Park neighbourhood of Shanghai. Photo: Bloomberg
Daniel RenandSandy Li
Liu Huali, whose family owns three apartments in Shanghai, is planning to sell one in case the city decides to raise the tax it imposes on residential properties as part of efforts to cool the market.
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Her decision, like that of many besides her, comes as the central government prepares to trial a new property tax in selected regions across the country. The recent announcement of a five-year pilot programme has prompted speculation that the existing levies in Shanghai and Chongqing – the only Chinese cities to impose them until now – may be raised as the government intensifies its campaign to tame runaway house prices.

“It is the right time to cash out now before a higher tax siphons off money from the family’s money box,” said Liu, an associate professor teaching philosophy at a local university.

“We are already subject to a tariff and obviously we will continue to be the main target of the new mechanism, which will be harsher.”

In Shanghai, residents who own a second home are liable for an annual levy of between 0.4 per cent and 0.6 per cent of the property’s fair value, calculated on the area that exceeds 60 square metres per capita.

Liu paid more than 10,000 yuan (US$1,563) annually for her three homes. They cover a total area of more than 300 square metres, exceeding the 180 square-metre threshold for a family of three. The extra 120 square metres is subject to the property tax.

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