CORPORATIONS and individuals who own land-use rights will have to start paying a land-use tax from tomorrow, according to a notice issued by the municipal local taxation bureau Wednesday.

The land-use tax will range between 1.50 yuan and 30 yuan (US$4.06) per square meter per year depending on the size and location of the property, the notice said. Land in Luohu’s Dongmen Road Central and Jiefang Road areas as well as Futian’s central district area will be levied at 30 yuan per square meter. Land in Bao’an and Longgang District will be levied at the lowest tax rate.

For the time being, individuals are exempt from the tax on their residences.

The new policy means that developers have to pay tax for the land approved by authorities for construction projects.

“With the introduction of the new tax, we will stop levying land-use fees,” said Zhang Jiashou, vice director general of the local taxation bureau.

For the past three-decades, China has been levying land-use fees rather than land-use tax, in order to attract foreign investment. “Land is a finite resource and has become scarcer with the development of the city,” Zhang said, adding that land-use fees can no longer help improve the rate of land utilization.

The move is widely expected to add costs to developers who are hoarding land in order to fetch higher prices in the future.

However, some real-estate experts are worried that the new tax will deal yet another heavy blow to people’s confidence in the property market. “Any new tax policy related to the real estate market will prove to be a test, given the fact that it is now a sensitive period for the property sector,” said Zhang Wei, head of a research center under the real-estate agency Centaline.

China has imposed a variety of taxes on developers, such as a land value-added tax and land-transfer fees.

The country will also levy a property tax in 10 regions on a trial basis next year, including Beijing, Shenzhen and Liaoning.

Analysts say that the property tax can reduce the number of idle properties, boost supply and slash housing prices.

Last month’s average housing price in the mainland’s 70 major cities jumped 9.5 percent on a yearly basis, compared with September’s 8.9-percent growth rate.

(SD News)