To levy a real estate tax on a residential building, it is necessary to consider the most basic living needs of the household and design a reasonable tax-free deduction scheme. Based on the data of China s household income survey, this paper compares and analyzes the fair effect, fiscal revenue effect and supply and demand effect of the three types of tax exemption methods:“by per capita area”,“by per capita value” and “by the number of property ownership”. The study finds that in terms of improving income distribution, raising fiscal revenues, and regulating supply and demand in the real estate market, the “deduction by the number of property ownership” method is the most unacceptable. The “deduction by per capita area” and the “deduction by per capita value” methods have their own pros and cons. This paper proposes to combine the per capita area-based deduction method and the per capita value-based deduction method and adopt the “area + value” compound deduction method, and makes corresponding suggestions.
Finance & Trade Economics