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The "housing pension system" has been mentioned again recently, and along with it came various opinions on the "housing pension system". What is the housing pension system? Is the housing pension a disguised form of property tax? Do ordinary people have to pay directly for the housing pension? The Paper (www.thepaper.cn) conducted interviews and sorted out the issues that everyone is concerned about.

What is the housing pension system?

On August 23, Dong Jianguo, Vice Minister of the Ministry of Housing and Urban-Rural Development, stated at a press conference on the theme of "Promoting High-quality Development" held by the State Council Information Office that it is necessary to study and establish three systems of housing physical examinations, housing pensions, and housing insurance to build a long-term mechanism for housing safety management throughout the entire life cycle.

Among them, the housing pension system has attracted much attention. Some people believe that the housing pension is aimed at "old, dilapidated and small houses", and have made remarks such as "old, dilapidated and small houses should be sold quickly".

Judging from public information, there is currently no unified definition of housing pension in the country.

Yin Fei, professor and dean of the School of Law at the Central University of Finance and Economics, said in an article that compared with ordinary commodities, the life cycle of housing is relatively long. In this process, in order to ensure the safety and normal use of housing, there will inevitably be costs for the maintenance, upkeep, repair, replacement and reconstruction of housing and its ancillary facilities and equipment. This type of cost can be called "housing pension". The housing pension involved in the current system design is limited to housing in the form of distinguished buildings within the urban planning area.

Yin Fei said in an interview with The Paper that the housing pension system is not aimed at "old, dilapidated and small houses". In layman's terms, housing pensions include personal accounts and public accounts. Among them, personal accounts are the current special housing maintenance funds; the establishment of public accounts is the focus of this system.

Yin Fei said that, for example, if common parts such as community elevators break down, personal accounts, namely special residential maintenance funds, will be used; but if after an earthquake, houses in the relevant area need to be inspected, or if a real estate project has major hidden dangers that involve the safety of people’s lives and property, or involve public safety, this part of the funds will need to be paid from the public account.

"From the starting point, the core of housing pension is to solve issues involving public safety by setting up a public account and using public funds," said Yin Fei.

Should ordinary people pay directly?

As the news about housing pension came out, jokes like “I originally bought a house for retirement, but found out that I still have to pay for the house in my retirement” appeared in the market. Will ordinary people have to pay for the establishment of housing pension again?

Yin Fei said that the housing pension system established this time mainly uses public funds and establishes a public housing pension account.At present, the funds in the housing pension public account come from public funds. According to the principle of "not increasing personal burden and not reducing personal rights and interests", local governments explore channels for raising funds.Therefore, the public housing pension account established this time will not increase the burden on property owners.

The housing pension that needs to be borne by individuals, that is, the part in the personal account, is actually the current special housing maintenance fund. This part of the money should be borne by the owner according to the "Civil Code of the People's Republic of China"; according to the current system design, the owner has already paid in advance when purchasing commercial housing or housing reform housing.It is mainly used for the maintenance, repair, renewal and renovation of common parts and common facilities and equipment of residential buildings after the warranty period expires. The focus of the construction of the housing pension system this time is the public account.

Yan Rong, director and researcher of the Shanghai Real Estate Science Research Institute, also expressed the view that the current research on establishing a public account for housing pensions does not require the people to pay directly.

So, where does the public money come from? The "Housing Pension System in my country: Background and Framework" published by Yan Rong, Hao Yanting and Guo Ge of Shanghai Real Estate Science Research Institute shows that the public account funds are used to ensure social public security and basic housing safety, and are used for regular housing physical examinations and repairs that affect public safety outside the scope of personal account funds, which has a social mutual aid effect. It is funded by fiscal funds, mainly from state-owned land transfer income, central fiscal urban affordable housing project subsidies (old community renewal and renovation funds), and local fiscal subsidies, supplemented by other real estate-related taxes. Among them, land transfer income as the main source of housing pension funds has two paths to consider: one is to directly increase the housing pension fund expenditure account in the existing land transfer net income. The second is to stipulate that no less than 2% of housing pension funds should be set aside in the major expenditure items. At the same time, the renovation funds of old communities are supplemented to the public account, which can not only take into account the establishment of projects on demand, but also facilitate the later maintenance of the renewal results.

Is housing pension a disguised property tax?

There are also voices in the market saying, "An enhanced version of property tax is coming", "Establishing housing physical examinations, housing pensions, and housing insurance systems is just another name for property tax", "There is no exemption, and tax will be collected as soon as a house is seen."

Yan Yuejin, deputy director of Shanghai E-House Real Estate Research Institute, said that housing pension is not property tax, and the current saying that "housing pension is a disguised property tax" is misleading, wrong, and irresponsible. Housing pension consists of personal accounts and public accounts. Among them, personal accounts have been established through paying special housing maintenance funds, while public accounts will be established in the future. They are funded by the government itself and do not require personal contributions.

Wang Yeqiang, a researcher at the Chinese Academy of Social Sciences and director of the Real Estate Committee of the China Urban Economics Society, also said in an interview with The Paper that property tax is a property tax that residents need to pay to the state for holding real estate. Housing pensions are fund collection accounts set up for future maintenance and repair of houses. The two are fundamentally different in nature. Property tax is levied by the state to support urban construction and public services, and has little to do with greening and public areas in the community. Housing pensions are a system established to ensure that residents' houses are kept in good condition and can withstand the erosion of time.

Why establish a housing pension system?

According to the Ministry of Housing and Urban-Rural Development, 22 cities including Shanghai are currently piloting housing pensions and other systems. So, if there is already a special maintenance fund, why do we need a housing pension?

Chen Wenjing, director of market research at China Index Academy, pointed out that my country currently mainly uses special residential maintenance funds for the maintenance and renovation of public parts of buildings and public facilities and equipment. Since my country's special residential maintenance funds generally come from the owners' own payments, the overall amount of funds is limited, and my country's real estate market is gradually entering the era of stock. As of the end of 2022, the proportion of houses built more than 30 years ago in China's existing urban areas will be close to 20%, and the proportion of old houses that need maintenance and renovation will increase rapidly.

Wang Yeqiang mentioned that the existing special housing maintenance funds are mainly for the maintenance and renovation of common parts of houses and public facilities and equipment. Affected by my country's rapid urbanization in the past, a large number of migrant populations have poured into cities, resulting in high-rise and super-high-rise buildings becoming the main form of residence. These buildings will face various aging problems after a certain number of years. Such as hidden safety hazards of housing structures, rust and aging of facilities and equipment, roof leakage, and exterior wall shedding. If they are not maintained and repaired in time, these buildings may gradually become dangerous buildings, threatening the safety of residents. The current special housing maintenance funds are paid by the owners themselves, with limited overall funds, low extraction efficiency, and uneven use efficiency. The existing special housing maintenance funds cannot meet the problem of "repairing as much as possible" for houses, and these renovations are mostly concentrated on the renewal of infrastructure, with insufficient attention to the maintenance and maintenance of the house itself, and it is difficult to solve the large-scale urban renewal and renovation of old communities in the stock era, especially the needs of aging maintenance of facilities and equipment in old communities at this stage. Exploring the establishment of a housing pension system to provide full life cycle security for houses will help better solve the problem of renovation funds for old communities, deepen the implementation of urban renewal actions, further promote the transformation and upgrading of the construction industry, and accelerate the construction of a new model for real estate development.

In fact, "housing pension" is not a new term. After the collapse of a self-built house in Changsha in April 2022, the Ministry of Housing and Urban-Rural Development deployed a special rectification campaign on the safety of self-built houses across the country the following month, pointing out that it was necessary to study the establishment of a housing pension system to better solve the problem of funding sources for the maintenance of existing houses.

Since 2023, the establishment of a housing pension system has been mentioned many times. At the two sessions last year, some NPC deputies and CPPCC members also suggested establishing a housing pension system to solve the problem of repairing old houses, which aroused heated discussions from all walks of life.

Chai Qiang, member of the National Committee of the Chinese People's Political Consultative Conference and president of the China Real Estate Appraisers and Real Estate Agents Association, pointed out in the "Proposal on Establishing a Housing Pension System as Early as Possible to Ensure the Housing Safety of the People" that the current maintenance of existing housing in my country mainly relies on special housing maintenance funds or self-raised funds by owners. For a single residential community, the scale of collected funds is generally only 6 million to 9 million yuan or even lower. With the aging of houses and their ancillary facilities and equipment, the demand for maintenance funds has increased year by year, and the maintenance funds of some residential communities are rapidly decreasing or even drying up. The existing special housing maintenance funds are far from meeting the demand for "all repairs" of houses. By establishing a housing pension system, it is possible to provide financial guarantees for the establishment and operation of a housing safety management system and better perform the government's housing public safety responsibilities.