Cars pass by a housing block in Binzhou, Shandong province, Feb 4, 2016. [Photo/IC]

A report by the Chinese Academy of Social Sciences advises the government to collect real estate tax. Is it the right time to collect such tax? No, says Beijing Times:

Just have a look at Shanghai and Chongqing municipalities, which have been collecting real estate tax for more than five years. The tax has not helped to increase the supply of houses, failed to stabilize property prices, and has not become a stable tax source for local governments.

That is because China's land is all owned by the State, and a real estate tax has little effect upon the market.

Actually, even the proposal that collecting a property tax will help regulate the market is in question because it distorts the essence of the tax. Tax is the relationship between citizens and the State, not consumers and the market.

Currently it remains debatable whether real estate tax is legal, because people do not "own" the land where their houses are built, which accounts for a high percentage of the price of property. People have already paid the State rent for the use of the land when buying their homes; it is thus unfair that they should have to pay again.

That's why the central leadership has not decided to collect real estate tax yet, even thought it has been listed in the legislation plan for years. More discussions are needed before a final decision is made.