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INTERIM REGULATIONS CONCERNING URBAN REAL ESTATE TAX

    Article 1  Except as otherwise stipulated, urban real estate tax shall be
collected by the tax authorities in accordance with the provisions of these
Regulations.
Article 2  The Ministry of Finance of the Central People's Government shall
designate the cities in which real estate tax shall be imposed; the tax shall
not be imposed in cities that have not been so designated.

    Article 3  The owner of property shall be liable for the payment of real
estate tax. Where the property is subject to a mortgage, the mortgagee shall
be liable for payment. Where the owner and the mortgagee are not present at
the locality in which the property is situated, where ownership of the
property has not been established or where disputes in connection with the
tenancy and mortgage of the property have not been resolved, the tax shall be
paid by the custodian or the user of the property on behalf of the owner or
mortgagee.

    Article 4  The following categories of real estate shall be exempt from
real estate tax:

    (1) real estate owned by military units, government agencies and social
organizations for their own use;

    (2) real estate owned by public schools and registered private schools
for their own use;

    (3) real estate used as a park, scenic spot or historic site or for other
public purposes;

    (4) real estate used exclusively by mosques or lamaseries;

    (5) real estate used exclusively by temples of other religions for which
tax exemption has been granted by the people's government at the provincial
(municipal) level or higher.

    Article 5  Reductions of or exemptions from real estate tax shall be
granted in respect of the following categories of real estate:

    (1) newly constructed buildings shall be exempt from real estate tax for
a period of three years commencing the month in which the construction is
completed;

    (2) renovated buildings for which the renovation expenses exceed one half
of the expenses of the new construction of such buildings shall be exempt
from real estate tax for a period of two years commencing the month in which
the renovation is completed;

    (3) other real estate in respect of which due to special circumstances,
the people's government at the provincial (municipal) level or higher, has
determined that reductions of or exemptions from real estate tax shall be
granted.

    Article 6  Real estate tax shall be assessed according to the following
criteria and tax rates: (Note 1.)

    (1) the tax on buildings shall be assessed annually at the rate of 1% of
the standard value of buildings;

    (2) the tax on land shall be assessed annually at the rate of 1.5% of the
standard value of land;

    (3) the tax shall be provisionally assessed annually at the rate of 1.5%
of the consolidated standard value of land and building in cities in which it
is difficult to determine separately the standard value of land and the
standard value of buildings;

    (4) the tax shall be provisionally assessed annually at the rate of 15% of
the standard rental value of real estate in cities in which it is difficult to
determine the standard values of land and buildings.

    Article 7  The standard values, as mentioned in the preceding Article,
shall be appraised as follows:

    (1) the standard value of buildings shall be appraised in terms of
different categories and grades in accordance with the general local market
value, and with reference to the current price of local building construction;

    (2) the standard value of land shall be appraised in terms of different
districts and grades according to such conditions as the location of the
land, the degree of prosperity of the locality and communication facilities
and with reference to the general local market value of the land;

    (3) the standard value of real estate shall be appraised according to the
location of the real estate and building, construction circumstances and
taking into account the local aggregate market value of real estate for
different districts and categories and grades of real estate;

    (4) the standard rental of real estate shall be appraised in terms of
different districts, categories and grades and, in general, according to the
local aggregate rental value of the land and its affixed buildings.

    Article 8  Real estate tax may be paid quarterly or semi-annually,
which shall be determined by the local tax authorities.

    Article 9  A commission for real estate assessment, composed of
representatives designated by local people's conferences of various circles,
and representatives designated by such departments as finance, taxation, land
administration, civil engineering (construction), industry and commerce, and
public security shall be established in all cities in which real estate tax
is imposed. The commission shall be under the direction of the local people's
government and shall be responsible for carrying out the work of real estate
assessment.

    Article 10  Real estate shall be assessed once a year. Where, on
examination of the original assessed value, the real estate assessment
commission determines that reassessment is not necessary, the extension of
validity of the assessment of the previous year shall be submitted to the
local people's government for approval.

    The results of assessment or the extension of the validity of the
assessment of a previous year, as mentioned in the preceding paragraph, shall
be subject to examination, approval and notification by the local people's
government.

    Article 11  The tax payers shall, within one month following the
notification of the assessment, file a return with the local tax authorities of the location in which the real estate is situated as to the condition of the
buildings, the number of rooms, the floor space and other information. Changes
in the addresses of the owners, transfers of ownership or the expansion or
renovation of buildings which result in changes in the value of the property
must be reported to the local tax authorities within 10 days following the
change of address, the transfer of ownership or the completion of expansion or
renovation.

    Returns in respect of real estate which is exempt from real estate tax
shall also be filed in accordance with the preceding provisions.

    Article 12  The tax authorities shall establish a register in respect of
the investigation and imposition of real estate tax and shall prepare detailed
maps showing the different grades of land; on the basis of the results of
assessments made by the commission and the returns filed by taxpayers, the tax
authorities shall proceed with the investigation, registration and
verification of the tax and shall issue a notice for payment of the tax to the
treasury within the time limit.

    In the event that a taxpayer disagrees with the result of the assessment
of the real estate, the taxpayer shall both pay the tax and apply to the
commission for consideration.

    Article 13  A fine of five hundred thousand yuan or less (Note 2.) shall
be imposed on a tax payer who fails to file the return within the time limit
as prescribed in Article 11.

    Article 14  In the event that a taxpayer fails to declare real estate
holdings or who files a fraudulent return and thereby attempts to evade the
tax shall, in addition to payment of the tax so evaded, be liable to a fine
of five times or less of the tax due.

    Article 15  Every person shall report violations of the provisions set
forth in the two preceding Articles. Following the investigation and disposal
of the violation, the informant shall be granted a reward in the amount of 20%
to 30% of the fine; confidentiality shall be maintained in respect of these
reports.

    Article 16  Where there is a failure to pay the tax on time, in addition
to setting a new time limit for payment of the tax, a late payment fine of 1%
of the amount of the tax due shall be imposed for each day the tax remains
unpaid.

    Where payment of the tax is not made within thirty days following the
time limit for payment, and the tax authorities consider that there is no
justification for late payment, the case shall be transferred to the people's
courts for disposal.

    Article 17  The provincial (municipal) tax authorities shall, in accordance
with these Regulations, formulate measures for the investigation and
collection of real estate tax and shall submit the measures to the provincial
(municipal) people's government for approval and implementation and shall also
submit the measures to the General Taxation Bureau under the Ministry of
Finance of the Central People's Government for the record.

    Article 18  Upon the promulgation of these Regulations, all local rules
relating to the taxation of real estate tax shall be annulled.

    Article 19  These Regulations shall go into effect as of the date of
promulgation.

Notes:

    Note 1. Beginning from 1953, the tax rates listed thereof have been
adjusted into 1.2%, 1.8%, 1.8%, and 18% respectively.

    Note 2. Here the sum "five hundred thousand yuan" refers to the Old
Renminbi, which, when converted into the New Renminbi, is equivalent to
"fifty yuan". -- The Editor