Real estate groups owe the Chinese tax authorities 460 billion

Real estate groups owe the Chinese tax authorities 460 billion

The scandal is resounding in China, as house prices have skyrocketed in recent years.

Hong Kong Vue

The main Chinese real estate groups have tax arrears totaling more than 3.8 trillion yuan (460 billion euros), according to a report on state television which sparked a heated controversy on Monday, November 25.

These firms should have paid more than 4.6 trillion yuan in property taxes between 2005 and 2012, but the authorities collected only 800 billion, CCTV reported on Sunday in a weekly show dedicated to consumer rights.

The channel said the figures were established by lawyer Li Jinsong, a Beijing law firm. Li Jinsong had already mentioned in the past these gigantic tax arrears but never benefited from such an important official media platform.

CCTV did not specify the total number of companies accused of not having paid all of their taxes, but said the list included 45 real estate groups listed on the stock exchange in China or abroad – including behemoths in the sector, from Agile to SOHO China and Vanke. Master Li was not immediately reachable by AFP.

Soaring prices

On Chinese social networks, many Internet users denounced the “greed” of real estate groups while apartment prices have recorded an incessant surge in recent years against the backdrop of the construction boom.

“Real estate developers are pushing prices up to unbearable levels. It is time for them to give up some of their loot ”, estimated a user of Weibo, Chinese equivalent of Twitter.

Some of the offending firms have stepped up to protest against Li Jinsong’s methodological errors, and the chairman of the Huayan Property group, Ren Zhiqiang, lashed out at CCTV.

“It was only after seeing this report that I realized the stupidity and ignorance of CCTV. I’m thinking about how to take CCTV to court to hold it to account, ”Ren Zhiqiang said on his Weibo account followed by many subscribers.

Hesitant market reactions

The reactions of the stock markets were mixed and hesitant: if Vanke lost 1.03% in Shenzhen at the start of the afternoon, Huayan on the contrary climbed 1.52% in Shanghai.

In Hong Kong, Agile – a group that owed 8.3 billion yuan to the state according to CCTV – saw its stock fall 2.46%, but at the same time, SOHO China gained 0.14%.

CCTV has attacked several foreign firms in recent months – including the American electronics giant Apple, criticized for its warranty policy and after-sales service, the South Korean Samsung, blamed for the quality of its smartphones, or the Starbucks coffee chain, accused of charging too high prices.

(With AFP)