Why China’s Property Tax Is Still a Long Way Off

The levy would make local government budgets less dependent on land sales revenue, but doubts remain about whether homeowners would be willing or able to pay

The ongoing property downturn in China has taken a harsh toll on local governments, adding to the urgency of finding more sustainable sources of revenue for them other than land sales.

As a new Peterson Institute working paper discusses, a nationwide property tax seems a suitable candidate. But can a property tax, what Jay Rosengard of Harvard University calls the tax “everyone loves to hate,” really happen in China any time soon? My answer is that it is unlikely.