Editor’s Note: Meng Xiaosu, former secretary to Wan Li, former chairman of the Standing Committee of the National People’s Congress, later served as deputy director of the State Administration of Import and Export Inspection, chairman of China Real Estate Group, and chairman of Xingfu Life Insurance. He is currently the chairman of Huili Fund, chairman of China Real Estate Group, vice president of the China International Multinational Corporation Promotion Association, and director of the Mencius Culture Committee of the China Cultural Promotion Association.
Produced by: Phoenix Finance “Cover”
From September 2nd to 4th, “New Opportunities, New Vitality – Phoenix Greater Bay Area Finance Forum 2024” will be held in the Hengqin Guangdong-Macao In-Depth Cooperation Zone. This forum is hosted by Phoenix Satellite Television and Phoenix.com, and co-hosted by the Executive Committee of the Hengqin Guangdong-Macao In-Depth Cooperation Zone. On the eve of the forum’s opening, Phoenix Finance “Cover” interviewed Meng Xiaosu, former head of the national housing reform research group and former chairman of China Real Estate Group.
In discussing new sources of local government revenue, Meng Xiaosu believes that taxing small property rights houses can not only bring huge tax revenue to local governments, but also solve the problem of legalizing small property rights houses.
Meng Xiaosu pointed out that the number of small property rights houses is huge, with a total area of about 8 billion square meters. Taxes can be levied on small property rights houses by making up for the land transfer fees, and the tax rate can be set higher than the tax rate for large property rights houses in the future.
“If we levy an annual tax at the international standard tax rate of 2% and 3%, with an average of 2.5%, then the value of this real estate is 80 trillion yuan, and we can collect 2 trillion yuan in tax a year, and it’s all local tax.” Meng Xiaosu said, “And the residents of these small property rights houses are willing to pay, why? They can afford to pay it on an annual basis, and once they pay, they become legal, and once they are legal, their value doubles.”
The following is an excerpt from the interview between Phoenix Finance “Cover” and Meng Xiaosu:
Meng Xiaosu: Then if we collect taxes from this (small property rights houses), the number is not small, 8 billion square meters. Of course, this tax is based on the method of making up for the land transfer fees. You set the tax higher, which will be much higher than the tax on large property rights houses in the future. If we levy an annual tax at the international standard tax rate of 2% and 3%, with an average of 2.5%, then the value of this real estate is 80 trillion yuan, and we can collect 2 trillion yuan in tax a year, and it’s all local tax.
And the residents of these small property rights houses are willing to pay, why? They can afford to pay it on an annual basis, and once they pay, they become legal, and once they are legal, their value doubles. If they pay for 10 or 15 years, these ten years are exactly the ten years of financial difficulties. We should think further ahead, and we should find a ten-year tax revenue for local governments. We just mentioned that the construction of affordable housing can provide 1 trillion yuan per year for 10 years, and levying property tax from small property rights houses can collect 2 trillion yuan per year.
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