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By Song Hongmei (chinadaily.com.cn)
Updated: 2007-12-13 14:03

China will levy a property tax sooner or later, and the government may begin collecting as early as next year, the Shanghai Securities News reported Wednesday, quoting Song Chunhua, Chairman of the China Real Estate Association.

Government measures should encourage people to buy houses for their own use and not for speculating, and ensure affordable housing, said Song at a property development forum. A property tax could curb speculative investment activities by reducing the number of idle properties and big houses, according to the chairman.

"If people want to live in big houses, they will need to pay taxes to make compensation," said Song. "It demonstrates social justice."

Establishing a property tax is imperative, said Gu Yunchang, deputy director of the China Real Estate and Building Research Institution, at the forum.

In October, prices for new residential apartments in China rose by 10.6 percent from a year earlier, according to statistics from the National Development and Reform Commission.

Curbing skyrocketing housing prices, to prevent a potential property market bubble from bursting, was one of the highlights on the agenda of the Central Economic Work Conference held last week.

China has picked 10 provinces and cities, including Beijing and Shenzhen, to institute property taxes on a trial basis in 2008, according to sources with the Office of the Central Leading Group on Financial and Economic Affairs, earlier media reports said.