BEIJING (Reuters – China should move legislation for a property tax proposal and not allow speculative buyers, a think tank stated. The statement aimed to show Beijing’s determination that it will manage the market, despite continuing upheaval in this sector.

The top Chinese legislative decision-making body, known as the Chinese Parliament’s highest authority on policy, announced last month that it would introduce a pilot real property tax in certain regions.

Property taxes could discourage speculators as well as cool the rising home prices, which have caused an affordability crisis over recent years. Analysts and investors see this tax as one of China’s most significant changes in real estate policy.

Ma Jiantang of the Communist Party Leadership at the Development Research Center of State Council wrote that China needs to do a good work with pilot projects.

The cost of owning property would rise, which could lead to a slowing of the purchase rate and reducing the cashflow for real estate developers.

China Evergrande Group, one of many indebted Chinese developers, has been under severe financial pressure since Beijing increased restrictions on borrowing and property sales fell. This forced them to look for alternative capital sources as the debt repayment deadlines approached.

Ma stated that homes are meant to be lived in and not for speculation in an article in People’s Daily. This is in keeping with similar advice given by high-ranking officials over the years.

Although the DRC is not an authority, it submits proposals to China’s State Council or cabinet regarding China’s economic and national development.