Researcher denies China property tax report, shares up

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Credit: Reuters

Mon May 24, 2010 12:06pm BST

* Researcher denies report, says misquoted him

* Report says property tax won't be launched within 3 years

* Gains in China property stocks ease

(Adds details, share prices)

By Zhou Xin and Simon Rabinovitch

BEIJING, May 24 (Reuters) - A government researcher denied on Monday a report that quoted him as saying that China will not introduce a controversial property tax within 3 years, which had pushed up real estate stocks by over 5 percent.

After the researcher's denial, Chinese property shares .SSEP gave up some gains but were still up 4.4 percent by 0336 GMT.

Property stocks have soared after the report by the China Times, a Beijing-based newspaper, said that it would delay implementing a housing tax for at least three years.

"It is purely an unfounded report, and I have never said that," Huang Hanquan, a rural economy researcher at the National Development and Reform Commission, later told Reuters.

The NDRC, China's powerful economic planning agency, is not the main government organisation overseeing the country's tax policies.

The finance ministry and tax bureau are usually the agencies tasked with China's tax regulations.

Property prices have been soaring, hitting a record annual 12.8 percent rise in April, although analysts expect price increases to ease in coming months after a series of harsh measures announced in mid-April. [nTOE64A00Z]

The market expects China to introduce a property tax if prices fail to ease significantly, with the cities of Shanghai and Chongqing likely to be the first to roll out such a tax on a trial basis.

Chongqing has already submitted plans to China's cabinet for approval, a tax official said earlier this month, while in Shanghai, the local government is considering slapping a 0.6 percent tax on residents who own large apartments. [nTOE64I05Q]

(Additional reporting by Langi Chiang; Writing by Lee Chyen Yee; Editing by Ken Wills)

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