Home • PRRES Inc. Journal • Read the Journal

Property Taxes and Fees – A Tale of Two Cities

Author/s: Nelson Chan, Hanbin Lou

Date Published: 1/01/2011

Published in: Volume 17 - 2011 Issue 1 (pages 110 - 131)

Abstract

Housing affordability is a concern around the world. Australia and China have different political systems. The former has a western democratic system, while the latter has a communist/socialist system. Despite the difference in political ideology and economy, the people in both countries are complaining about the high property prices problem. There are many factors for high property prices. High property taxes and fees are alleged to be a major suspect for causing high property prices. The paper examines the property taxes and fees for residential developments in these two countries. Sydney in Australia and Wuhan in China are chosen as case study cities. The property taxes and fees in these two cities are examined and compared. It is found that property taxes and fees account for a substantial portion of property prices in both cities. Housing affordability can be enhanced if the relevant governments are determined to reduce the amount of property taxes and fees.

Download Full Article

Download the Full Article PDF

14445921.2011.11104320.pdf (407kB)

Keywords

Housing Affordability - Property Fees - Property Prices - Taxes

References

ABC News, 2010, Council rates lifted across NSW, Friday 2 July http://www.abc.net.au/news/stories/2010/07/02/2942942.htm, accessed on 20 July 2010.
Addae-Dapaah, K &Wong, G.K.M., 2001, Housing and the elderly in Singapore -financial and quality of life implications of ageing in place, Journal of Housing and the Built Environment, Vol. 16, No. 2, pp. 153 - 178.
Australian Bureau of Statistics (ABS), 2009, Total Taxation Revenue http://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/5506.0Main%20Features22008–09?opendocument&tabname=Summary&prodno=5506.0&issue=2008–09&num=&view=, accessed on 30 January, 2010.
Australian Taxation Office (ATO), 2010a, Individual Income Tax Rates http://www.ato.gov.au/individuals/content.asp?doc=/content/12333.htm&pc=001/002/046/002/002&mnu=&mfp=&st=&cy=1, accessed 27 July 2010.
Australian Taxation Office (ATO), 2010b, Company Tax Rates http://www.ato.gov.au/businesses/content.asp?doc=/content/44266.htm&mnu=43164&mfp=001/003, accessed 27 July 2010.
Australian Taxation Office (ATO), 2010c, GST and property.
Baxi, S., 2010, Affordable housing in India: Role of Housing Microfinance Accommodation Times, http://www.accommodationtimes.com/real-estatenews/affordable-housing-in-india-role-of-housing-microfinance/, accessed on 20 July 2010.
Bates, S & Kane, C., 2005, The Future of Housing in New Zealand, Centre for Housing Research, Aotearoa New Zealand.
Blake Dawson and Jones Lang LaSalle (JLL), 2008, Australian Real Estate: A legal guide for foreign investors.
Burke, T., 2008, Using an Institutional Framework for Assessing Housing Problems: an Australian Case Study, presentation to seminar at the Department of Urban Planning and Design, University of Hong Kong, November 26.
Butler, S., Williams, M., Tukuitonga, C. & Paterson, J., 2003, Problems with damp and cold housing among Pacific families in New Zealand, The New Zealand Medical Journal, Vol. 116, No. 1177, http://www.nzma.org.nz/journal/116–1177/494/, accessed on 20 July, 2010.
Chan N., 1999, Land-Use Rights in Mainland China: Problems and Recommendation for Improvement, Journal of Real Estate Literature, Vol. 7, No. 1, pp. 53 - 63.
Chancellor, J., 2010, Median prices up in Sydney - but not as much as in Melbourne, Sydney Morning Herald, 20 April, http://www.smh.com.au/business/property/median-prices-up-in-sydney--but-not-as-much-as-in-melbourne-20100419-spe6.html, accessed on 25 April, 2010.
Changfengyaguo, 2008, Wuhan Property Taxes and Fees Information Table, http://blog.sina.com.cn/s/blog_51a00c3e010094z3.html, accessed 30 March, 2010.
Chesterton, A., 2007, Builders lobby for $3bn aid, Sunday Telegraph, 15 July, p. 18.
Chew, V., 2009, Housing and Development Board (HDB), National Library Board Singapore, http://infopedia.nl.sg/articles/SIP_1589_2009–10-26.html, accessed on 20 July 2010.
City of Sydney, 2006, Development Contributions Plan 2006.
Cox, W. & Pavletich, H. (2008), Ratings for Major Urban Markets, 4th Annual Demographia International Housing Affordability Survey: 2008, Introduction.
Cox, W. & Pavletich, H. (2009), Ratings for Major Urban Markets, 4th Annual Demographia International Housing Affordability Survey: 2009.
Department of Planning, NSW (DoP), 2008, Review of Infrastructure Contributions, Planning Circular PS 08–017.
Desmond, M., 2009, America’s New Housing Problem: Unemployment, Forbes.Com, http://www.forbes.com/2009/02/17/foreclosure-boston-fed-markets-equity-0216_mortgage_12.html, accessed on 20 July, 2010.
Ding, C. & Knaap, G., 2003, Urban Land Reform Policy in China, Land Lines, Vol. 15, No. 2, http://www.lincolninst.edu/pubs/793_Urban-Land-Policy-Reform-in-China, accessed on 15 July 2010.
DTZ Research, 2010a, Property Times Shanghai, Q1.
DTZ Research, 2010b, Property Times Wuhan, Q1.
Duncan, J., 2008, Causes of Inadequate Housing in Latin America and the Caribbean, Habitat for Humanity.
Easton Town Council, 2010, 2010 Comprehensive Plan: Housing, Maryland, p. 132 - 142.
Feldman, R., 2002, The Affordable Housing Shortage: Considering the Problem, Causes and Solutions, Federal Reserve Bank of Minneapolis, Banking and Policy Working Paper 02–2.
Feng, H.L., 2009, Every Government Department Should Confirm Property Taxes and Fees, China Commercial News, 31 July, http://www.cbh.com/news/sbsp/2009/731/0973160F46I78H0GA23095.html, accessed on 11 February, 2010.
Global Urban Competitiveness Project (GUCP), 2007, China’s City Competitiveness Report No. 5, http://www.gucp.org/en/report.asp?bigclassid=3&smallclassid=27, accessed on 25 February, 2010.
Hensarling, J., 2009, The true causes of the housing crisis, http://www.politico.com/news/stories/0409/21819.html, accessed on 20 July 2010.
Hodge, I. & Cameron, G., 1989, Raising infrastructure charges on land development: incidence and adjustments, Journal of Property Research, 6:3, pp.171 — 182.
Housing Industry Association Ltd (HIA) 2003, Restoring Housing Affordability – the housing industry’s perspective.
Jia, J.F., 2008, Can Housing Prices be Lowered by Reducing or Waiving Property Taxes and Fees? Market News, http://house.focus.cn/news/2008–03-10/439527.html, accessed on 16 September 2009.
Jones Lang LaSalle (JLL), 2007, China 30 – China’s Rising Urban Stars.
Jones Lang LaSalle (JLL), 2009, China 40 – China’s Rising Urban Stars.
Karantonis, A., 2007, Is property being over taxed – a NSW study, Australian and New Zealand Property Journal, Vol. 1, No.3, pp. 176 – 185.
Khurana, M.L., 2005, Cooperatives - An Answer to Housing Problems of Slums, The World Prout Assembly, http://www.worldproutassembly.org/archives/2005/09/cooperatives_an.html, accessed on 20 July 2010.
Klein, E., 2010, Is China in a housing bubble? June 9, The Washington Post, http: //voices.washingtonpost.com/ezra-klein/2010/06/is_china_in_a_housing_bubble.html, accessed on 20 July 2010.
Modern Express News, 2007, Developers Make Profit but Dislike High Taxes, 2 July, http://www.cs.com.cn/fc/03/200707/t20070702_1156844.htm, accessed on 16 February 2010.
Needham, B., 2000, Land Taxation, Development Charges, and the Effects on Land-Use, Journal of Property Research, Vol. 17, No. 3, pp. 241 – 257.
Office of State Revenue NSW (OSR NSW), 2009, Stamp Duties Rates.
Office of State Revenue NSW (OSR NSW), 2010, Land Tax 2010.
Peardon, N., 2008, Housing – A Basic Need, Ezine @rticles, http://ezinearticles.com/7Housing—A-Basic-Need&id=1263590, accessed 20 July 2010.
Power, B, 2007, Promoting Affordable Housing by Addressing the Root Cause, Presentation to the Oakland Blue Ribbon Commission on Inclusionary Zoning, February 21, http://www.independent.org/issues/article.asp?id=2030, accessed on 20 July 2010.
Prince, J.B., 2008, Taxation Pocket Guide For Australian Property Investors, 2 edtion, McGraw Hill Australia.
Ranghelli, L. (editor), 2005, The Crisis in America’s Housing: Confronting Myths and Promoting a Balanced Housing Policy, The Center for Economic and Policy Research.
Reinhardt, S. & Steel, L., 2006, A brief history of Australian tax system, Paper presented to the 22 APEC Finance Ministers’ Technical Working Group Meeting in Khanh Hoa, Vietnam, on 15 June.
Sappone, C., 2010, Australia faces housing affordability ‘time bomb’: developer, The Age, March 17, http://www.theage.com.au/business/property/australia-faces-housing-affordability-time-bomb-developer-20100317-qdii.html, accessed on 20 July 2010.
Skaburskis, A., 1990, The burden of development impact fees, Journal of Property Research, 7:3, pp.173 — 185
TJCN, 2009, 2008 GDP Ranking, http://www.tjcn.org/plus/view.php?aid=9500, accessed on 20 March 2010.
Urban Development Institute of Australia NSW (UDIA), 2008, HOUSING AFFORDABILITY: a little less conversation, a little more action.
Wikipedia, 2009a, Sydney, http://en.wikipedia.org/wiki/Sydney, accessed on 27 March, 2010.
Wikipedia, 2009b, Wuhan, http://en.wikipedia.org/wiki/Wuhan, accessed on 27 March, 2010.
Wisegeek, 2010, What is property tax? http://www.wisegeek.com/what-is-property-tax.htm, accessed on 20 July 2010.
Wu, P., 2009, State Land Ministry Announced the Land Cost of 620 Development Projects to Reply the Accusation “Land Cost Pushes Up House Prices”, Xinjing News, 25 July, http://news.xinhuanet.com/house/2009–07/25/content_11768893.htm, accessed on 11 February 2010.
Wuhan City Government, 2010, Welcome to Wuhan, http://www.wh.gov.cn/cms/theme/include/htm/whgl/index.htm, accessed on 27 February, 2010.
Zhao, X.T., 2009, Real Estate Development Needs to Pay 116 items of Property Taxes and Fees, Southern City News, http://schouse.newssc.org/system/2009/09/07/012311132.shtml, accessed on 11 March, 2010.
Zhou, J.B., 2008, Horrifying Property Taxes and Fees, China Industrial and Commercial Times, http://www.law110.com/shuifei/law110shui_2008001.html, accessed on 5 March, 2010.
Zhu, Y. (edited), 2008, 10 Committee Members Submitted Proposal Over Night: Reduce Taxes and Fees to Arrest House Price Escalation, Beijing Youth News, http://www.people.com.cn, Accessed 25 March, 2010.