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A newly-revised land regulation means that foreign-backed enterprises using land in Beijing must pay a land-use tax, according to a report by Beijing Business Today.

According to the revised standard, the land use tax now has been tripled, and ranges from 1.5 yuan to 30 yuan per square meter for large cities; from 1.2 yuan to 24 yuan for medium-sized cities; from 0.9 yuan to 18 yuan for small cities; and from 0.6 yuan to 12 yuan for small towns and mining regions.

Related readings:  Land use tax raised to stop resource abuse  Shanghai levies individual land VAT Foreign investment in real estate regulations issued  Special campaign to rein in real estate sector

The new regulation is part of an effort to control the excessive expansion of construction, together with serious land resource abuses in some regions and industries.

Liu Huan, a professor with the Central University of Finance and Economics, commented that the tax hike may boost housing prices if no efficient control measures are implemented.

Statistics show that the total amount of land use tax collected in 2006 in Beijing was only 400 million yuan (US$52.29 million).

According to the regulation, land meeting one of seven criteria is exempt from the tax, including land for use by government organs and the military; and land for use by institutions funded by government financial departments; land for public space like roads, squares and grasslands; land reserved for temples, parks and historical sites; and land for production use in agriculture, forestry, hunting and fishery sectors.

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