Housing Price, Public Expenditure and Real Estate Taxes in China

摘要

This study employed all China provinces’ panel data from 1998 to 2006 to analyze the relationship among housing price, local public expenditure and real estate taxes. The results showed that housing price, local public expenditure and real estate taxes have mutual feedback effects. Housing price would be reduced for real estate taxes capitalization, and also be increased because of the capitalization of local public services in China. It was concluded that real estate taxes policy and pubic expenditure budget should be jointly used to control the real estate market development. A reform on real estate taxes system is necessary. The tax burden in real estate circulation should be reduced, and property tax should be collected.