(ECNS) -- A Chinese think-tank has urged the government to accelerate the introduction of a property tax law to ensure stable development in the sector.
The Institute of Urban and Environmental Studies at the Chinese Academy of Social Sciences released its real estate blue paper on Tuesday, saying imbalanced development is a distinctive feature of China's property market.
The report said the current tax system focuses on the process of home sales and purchases but a more comprehensive system should also consider taxing other business activities such as developing, keeping, transferring and leasing property.
Wang Yeqiang, chief editor of the report, said first and second-tier cities saw property prices rise quickly in contrast to smaller cities, creating a huge oversupply of housing units. Runaway prices will significantly weaken purchasing ability in the future and impact the real economy.
The report also said that China has not established long-term mechanisms to promote steady and sound development of the real estate sector. It urged more category-based and targeted steps to regulate the market in line with specific conditions in various cities.
Wang said governments in smaller cities are still obsessed with the property-driven growth model although infrastructure and public services were underdeveloped.
The report pointed out problems in the home rental market, including the lack of professional agencies and regulations to protect the legal rights of parties involved. It also suggested the government increase affordable housing for low-income earners.
