Introducing a property tax in China has been an ongoing conversation for a few years now.
Up to recently it looked like 2018 was going to be the year of introducing property tax in China but now it appears it may be delayed until 2019.
As we know the number millionaires in China has seen a surge in massive years and they may soon overtake Japan with the most millionaires in Asia.
Among the rich in China property is the most popular investment with an estimated $44 trillion invested in property. The property tax is likely is have the potential to have quite the affect on property prices. Should we care if we won’t live in China?
Well we certainly should pay attention, especially to those living in major urban areas such as New York, Paris, and London. The reason is that a massive amount of the $44 trillion invested by Chinese nations is not within their own country but in major urban areas such as those mentioned.
When the property tax in China is introduced it may cause a slowdown in foreign property purchases by Chinese nationals. Thereby it will be having a direct impact on prices with areas outside of China.
I recently spoke with a friend from London who bought an apartment in the Docklands area. The development in which she lives was fully sold out before it was even built. It has now been completed more than 9 months and she estimates it is 20-30% occupied. The reason for this is well known.
Foreign investors (presumably many from China) bought apartments for capital appreciation only. They don’t even intend to rent them out. Just let the investment lie and appreciate and perhaps sell it in the future. This stresses my friend out because she has no neighbors to mind her cat when she is away!