Author(s)

Yiting Wang

Corresponding Author

Yiting Wang

ABSTRACT

This paper analyzes the current situation of real estate in Shanghai and the reasons for the failure to implement the real estate tax in 2011. It analyzes the social welfare of real estate under different tax bases, tax rates, and different exemption schemes to adjust the gap between the rich and the poor. Using the "China Household Finance Survey" as the data basis, the data is analyzed by the Gini coefficient method on household income, household housing area, the market value of the real estate, and the number of houses owned by households. The higher the real estate tax rate, the higher the Gini coefficient. By calculating different exemption schemes, when the per capita living area exemption scheme is 35-60 square meters, it can adjust the income gap of Shanghai residents' families. It shows that the real estate tax rate should not be set too high to avoid the loss of social welfare of resident families. At the same time, the expansion of the tax base, the increase of taxes on the existing houses, and the use of the per capita living area exemption can effectively supplement the fiscal revenue to adjust the income gap.

KEYWORDS

Real estate, Tax reform, Fiscal revenue, Shanghai