China's State Council plans to expand property tax reform trials to more regions and start taxing residential property owners, Xinhua reported.

The plan, approved by the Standing Committee of the National People's Congress, China's top legislature, is designed to guide rational property purchase and will last for five years, according to the report, East Bloomberg reported.

The locations and number of regions where the tax reform trials will take place have not been specified.

Price Crisis

China's property prices have climbed to unsustainable levels since private home ownership was legalized in 1998, and the government has waged an ongoing battle to control speculators.

China's real estate sector shrinks for the first time since the coronavirus outbreak
Authorities began taxing properties during 2011 in Shanghai and Chongqing, charging an annual fee for a second or more expensive home.

Personally owned housing is currently not taxed according to a law implemented in 1986, while commercial properties are subject to an annual tax.

Local governments generate income from real estate developers mainly through land sales, collecting a total of 8.4 trillion yuan ($1.3 trillion) last year.

China's new home prices fell for the first time in six years and sales fell 16.9% in September year-on-year, as Evergrande Group, the country's second largest property developer, faced a debt crisis, leading to a nationwide real estate sector slowdown.

Evergrande Group, the country's second-largest real estate developer, faced a debt crisis.