CHINA may not roll out its long-awaited property tax until 2017, as more time is needed to draft legislation, The Beijing News reported yesterday, citing a senior researcher at the Ministry of Finance.

    The proposed tax, which would be based on the value of property rather than transaction values, could require drafting through next year and then might be implemented in 2017, The Beijing News quoted Jia Kang as saying at a recent conference.

    Analysts and industry observers have said that a property tax is a more sustainable way to tax property but recent market weakness makes implementation much less likely in the near term in the country.

    Authorities said late last year they were speeding up legislation, but some analysts have pointed out that the government’s recent moves to loosen mortgage restrictions and support the country’s sluggish housing market suggest that the property tax is no longer an urgent priority.

    The tax on property values has been used on a trial basis in Shanghai and Chongqing since 2011, and is widely seen as discouraging property investment.

    The property sector contributes significantly to China’s economy, and the current housing downturn has raised concerns that it could contribute to a sharper-than-expected drag on the world’s second largest economy.

    (SD-Agencies)