Urban areas in several regions of China are exploding with growth and expanding at a rapid pace. This article examines the revenue sources local governments may use to finance the costs of rapidly expanding infrastructure and provide local public services. Starting with an examination of current urban development policy, recent reform proposals for urban land development and housing construction tax and fee reforms are studied. The primary focus is on the policy debate as to whether the existing system of multiple real estate taxes and fees, often applied once at the time of house purchase, should be converted into a unified real estate tax requiring annual payments. The potential impacts of this policy change on housing prices and patterns of housing development are analyzed.
