China Imposes Tax on Property Speculators

123jump.com Staff
10 Dec, 2009
New York City

China took steps to control housing market speculation and imposed additional tax on property that is sold in less than five years. China extended tax rebate for the purchase of automobiles and home appliances. Automakers and electronics retailers increased in Shanghai trading.

[R][6:00 AM New York, 6:00 PM Hong Kong – China took steps to control housing market speculation and imposed additional tax on property that is sold in less than five years. China extended tax rebate for the purchase of automobiles and home appliances. Automakers and electronics retailers increased in Shanghai trading.[/R]

Hong Kong stocks dropped as investors locked annual gains before the close of the year. However, stocks in Shanghai rose as Beijing took measures control price increases real estate sector.

In Hong Kong Hang Seng Index fell 0.2% or 41.72 to 21,700.04, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, slipped 0.3% or 8.58 to 3,270.90. In Shanghai, the CSI 300 Index gained 0.6% or 22.76 to 3,577.24.

Daily turnover on main-board increased to HK$82 billion from HK74.5 billion yesterday.

China Imposes Sales Tax on Homes

Peoples Daily Online reported today that China has imposed a sales tax on homes sold within five years of purchase to control speculation in housing market and “bubbles in its real estate sector.”

Premier Wen Jiabao pledged support for affordable housing projects in Chinese cities at a State Council meeting on Wednesday.

The time period has been revised from two years in order to control over-speculation on short-selling of urban homes.

Home prices in 70 major Chinese cities rose at the fastest pace in 14 months in October.

Beijing Extends Tax Cuts and Subsidies

Separately, the online edition noted Beijing has extended its tax cuts and subsidies for purchases of small vehicles and electric appliances to 2010.

A tax cut on sales of cars with engines of 1.6 liters or smaller was extended until the end of 2010, and the tax was increased to 7.5% from 5%.

Subsidies for the purchase of small models will be raised to Rmb18, 000 from Rmb5,000.

Gainers & Losers

China’s consumer stocks rose. Hisense Electric jumped 5.7% to Rmb24.34.

Realty stocks fell. China Vanke dropped 1% to Rmb11.9 on the new tax interventions by China’s State Council meant to stem speculation.

Financial stocks rose. Industrial and Commercial Bank of China jumped 0.4% to Rmb 5.24.

Automakers traded mixed. FAW Xiali Automobile rose 1.6% to Rmb10.28 and SAIC Motor fell 0.4% to Rmb25.82.

China Longyuan Power rose 9.4% to as high as HK$9.26 on its trading debut. Its IPO price was HK$8.16.

Global Green Tech Group gained 13.1% after announcing it will acquire a majority
stake in gold mines in Yuanling County in Hunan Province.

South Sea Petroleum Holdings advanced 10.6% after saying it will issue $100 million in 6% interest convertible debentures due 2015 to finance expansion projects.

HSBC rose 0.5%.

Realty stocks also fell in Hong Kong. Evergrande Real Estate fell 2.8%, Glorious Property plunged 4% and Shimao Property dropped 2.5%.