The calculator takes in the tax base and tax rate specifications as inputs and produces the tax revenue as the output. It also shows how effectively the tax under the custom regime can substitute the revenue generated through land finance (using the average land finance revenue for Wuchang district between 2019 and 2021). The calculator also shows the average tax paid per resident and the tax as a percentage of average resident disposable income (using the 2022 number).

The underlying map shows the location of communities in Wuchang district, with the marker indicating the average price of the properties in that community.

Despite decades of deliberation, residential property tax is yet to be levied at a national scale in China. Historically, despite being the primary beneficiary of the tax’s revenue, local governments were apathetic toward adoption because it contradicts their existing revenue generation model through land finance, or the sale of land-use rights to property developers. Recently, however, as the property market enters a persistent downturn, the credibility of land finance as a driver of revenue is in question. Furthermore, the central government has been signaling that collection of residential property tax might be imminent.

This project provides timely analysis on the viability of property tax as a substitute revenue generation method for local governments in place of land finance. Using recent data scraped from Fang.com, the leading real estate marketplace in China, for one municipal district and computation done in R and Python, I establish that property tax seems to be a potential alternative. However, upon further analysis completed through the website visualizer and calculator built with the Google Maps API, I find that such a substitution would come at the high price tag of around 20 percent of the disposable income of local residents.