The pilot programs in Chongqing and Shanghai target different types of homebuyers. Under Chongqing’s detailed plan, taxes apply to owners of existing villas and villas to be purchased after March 27. The tax applies to apartments at least twice as large as the average floor space of apartments sold in the southwestern city. In Shanghai, the property tax applies to only new housing, including villas, purchased after March 27. The overall tax burden will be heavier in Chongqing than in Shanghai. There are three tax rates in Chongqing: 0.5%, 1% and 1.2%, while it ranges from 0.4% to 0.6% in Shanghai.
While many have ridiculed the tax as a red envelope, some scholars have bluntly declared the taxation “robbery.”
Both the property tax and the New Eight Regulations, announced on the same day, were part of the government’s efforts to cool the housing market since mid-April 2010. In the face of the seemingly endless cascade of measures to tamp down the housing market named by number, many netizens have said the property market may one day see a New 250 Regulations issuance. In Chinese, the number 250, “erbaiwu” is translated as “foolish.”