On the afternoon of February 1, at the time of panic selling in the A-share market, the real estate sector almost broke out, the plate index rose 4.02%, and nine real estate stocks including Vanke and Poly Real estate rose. But causes this real estate stock carnival, is an unconfirmed "the housing mortgage loan will deduct the tax" the news.

"In the current individual income tax reform program, improving the pre tax deduction is an important part of the comprehensive taxation, but it still needs a long time to determine how and when to increase and what items to add." A person close to the tax administration department of the Ministry of Finance told the China times that according to the requirements of the individual income tax reform, the future individual income tax calculation method will increase the special deduction items such as supporting the elderly expenses, children's education expenses, housing mortgage loan interest expenses and other special deduction items on the basis of reasonably determining the basic deduction standard of comprehensive income.

Although the news is not groundless, there are still many obstacles in its implementation.

Chen Jianbo, an independent economist, said: "the personal tax reform is a big game and a basic tax system that needs to be adhered to for a long time. For policy makers, it is not realistic to add more economic functions to the tax reform. Especially in terms of stimulating the demand for real estate, this is only a current priority, not a long-term plan." However, he also admitted that in the background of the central government's demand for real estate inventory, the warming expectation of the property market is strengthening.

General direction of tax reform

"The policy design of tax deduction for interest expenditure of housing mortgage loan is not a new deal in fact. The policy of tax deduction has been mentioned in the work of the finance and taxation department in promoting the reform of personal income tax this year. At present, with the formation of the reform scheme, it is inevitable to repeatedly discuss the specific content and direction of the reform." The person close to the tax department of the Ministry of Finance said.

The so-called mortgage interest tax credit, generally speaking, refers to the deduction of the interest generated by the mortgage as a pre tax deduction when calculating and Levying Individual Income Tax.

This tax policy was proposed as early as the first half of this year. On May 8, the State Council approved and transmitted the opinions of the national development and Reform Commission on the key work of deepening the economic system reform in 2015, proposing to study the individual income tax reform scheme combining comprehensive and classified methods. "The direction of individual income tax reform is to include the burden of taxpayers' families into the deduction factor, and the individual income tax may be deducted with mortgage loans in the future." Lou Jiwei, Minister of finance, once said publicly.

"In fact, in the process of promoting the tax system reform, the finance and taxation departments have framed various reform methods of different tax systems. The mortgage interest tax credit is only a small item of the tax calculation algorithm in the reform of personal income tax, which is in line with the direction of individual income tax reform of establishing classification and comprehensive collection." The source close to the tax department of the Ministry of Finance told reporters.

According to the requirements of the central government to promote the reform of personal income tax, "tax equity" is the basic direction of the reform, and the combination of individual income tax classification and comprehensive tax collection means that in the future, the tax burden of taxpayers' families, such as supporting population and mortgage loans, will be included in the deduction factors to further reflect the tax fairness.

"However, in a sense, what kind of time point to promote what kind of tax reform, which is closely related to the economic policies of the central departments, this is a way for the central government to make use of policy regulation." A person in charge of the development research center of the State Council told our reporter that the individual income tax reform including "mortgage interest tax credit" was indeed "advanced ahead of time".

As early as the end of June 2014, the Political Bureau of the CPC Central Committee issued the overall plan for deepening the reform of the fiscal and taxation system. Although the reform of individual income tax is an important part of the tax system reform, it ranks last among the six categories of taxes that need to be reformed. At present, the individual income tax reform has surpassed consumption tax, resource tax, environmental protection tax and real estate tax, and has become the fastest tax to submit the plan in the tax system reform.

"After the replacement of business tax with value-added tax (VAT), the tax burden of enterprises mainly depends on the items of input tax deduction; however, as far as the current tax calculation method is concerned, the tax burden of most real estate enterprises has increased after" replacing business tax with value-added tax " Liu Jianwen, director of the center for financial and tax law research at Peking University, once told reporters.