Little room for more China property tax cuts

BEIJING, Dec 25 - China is unlikely to cut property transaction taxes much further and will continue to curb housing purchases for the purpose of investment, a senior government economist said in remarks published on Thursday.

The government last week shortened the lock-up period during which home owners are subject to a business tax if they resell their homes and said it would levy the tax on capital gains instead of the overall value of the sold property.

The changes were part of measures to support the ailing real estate market, a pillar of Chinas economy which has been slowing from the impact of the global financial crisis.

"China has reduced the transaction taxes and fees significantly and there is now limited room for further cuts," Qin Hong, deputy research head at the Ministry of Housing and Urban-Rural Development, told the official China Securities Journal.

Beijing has also repeatedly pledged to provide more affordable homes to accommodate its low-income population and plans to spend 900 billion yuan ($132 billion) in the next three years to build such homes.

"Any new policy in the future will continue to restrict investment and speculation in the property market while encouraging purchases for self-use," the newspaper paraphrased Qin as saying.

China raised transaction taxes, down payments and mortgage rates to curb property investment and soaring housing prices in the past two years, before recently rolling out new measures to stimulate demand for owner-occupied homes as part of its effort to boost economic growth. ($1=6.835 Yuan) (Reporting by Langi Chiang)