The Finance Ministry announced Wednesday that it will sell its first wooden houses to fund its plan to increase the tax-free income of the rich.
House prices are rising around the world, but the rise in the cost of building is accelerating, according to a study by the International Monetary Fund and other economists.
The IMF said that China is now on track to exceed the U.S. as the world’s most expensive house builder, according with an index of the world in 2018.
In Canada, the average price of a home jumped 11.5 per cent from 2016 to 2018, the report said.
“The increase in demand for wood in China is driving up prices,” said Rana Subba, senior economist at the IMF’s World Economic Outlook Department.
“While the impact on price growth in the country will be limited, this trend could eventually lead to a steep increase in house prices in other countries.”
The Finance Ministry, which runs the country’s central bank, said it will purchase 10 wooden houses from China this year for $1.50 million, or $1 million each, with the first to be sold by Dec. 31.
The plan is to sell the remaining houses through a special portal that will allow buyers to make their own arrangements.
The ministry said it would use about $20 million from the sales.
The project is being funded by the Chinese government’s fiscal consolidation fund, the People’s Bank of China.
“In order to keep housing affordable and affordable for people in need, the Finance Ministry has decided to make the wood houses available for people to buy at affordable prices,” Finance Minister Wang Qishan said in a statement.
“We are in the process of preparing for this project to launch.
We will give the project a green light when we reach this stage.”
The government is working on plans to increase tax-exempt income from the wealthy, including by making the sale of properties tax-deferred and exempt from sale taxes.
That means the proceeds will be distributed to poor people, and not to rich people.
In October, Wang announced plans to make a further 20 per cent increase in the exemption of properties to the middle class.
The increase will also allow people with low incomes to pay property taxes.
The government also announced it would raise taxes on the wealthy by 1 per cent for people earning more than $1 billion a year.
That would raise about $1 trillion in revenue for the government over the next decade.
China is a wealthy nation that boasts a vast number of billionaires.
But the government is under pressure from international creditors to cut taxes for the wealthy.
Many wealthy people also have assets that have been frozen by their governments, which have limited the value of their wealth.
On Wednesday, the finance ministry said the new plan would help boost the income of “the rich and middle class,” while also helping the poor.
“In line with the plans of the new tax reform, the government will encourage the rich to purchase their homes and build more houses, thereby boosting the supply of housing and boosting the tax base of the country,” it said in the statement.