Taxes to be Levied According to Property Values
The local taxation authority will start taxing according to property values rather than the contractual prices of pre owned housing starting July. Property tax is another measure that has been implemented to control speculation on housing and to tighten taxation control over transactions.
The new taxation mechanism will give a picture of home transactions and expose taxation loopholes by preventing any housing vendors from signing contracts that have prices lower than the market price in order to evade taxes. Housing transactions that are registered with lower prices than the property value will be automatically reported to taxation bureau employees. The system will also produce reasonable property taxes plus the taxation bureau will levy the taxes including business tax, personal income tax and transaction taxes of the buyers.
The location, historical records, structure, construction costs and similar property prices will determine property value. These values will be updated every six months and will be adjusted according to changes in the market price that is confirmed by land resources authorities. Business tax is calculated at a taxation value of 5.6 percent, while income tax is imposed at 20 percent of the net profit when transaction fees and other fees are deducted.