August 26, 2024 (InvestinChina.asia)- China is piloting a new house pension system aimed at ensuring the safety and maintenance of residential buildings throughout their lifecycle. This initiative, which involves both personal and public accounts, seeks to address the challenges posed by aging urban housing stock without burdening homeowners with additional costs.
Overview of the House Pension System
What is the House Pension System?
The house pension system is a mechanism designed to ensure the safety and maintenance of residential buildings. It comprises two components: a personal account and a public account. The personal account is funded by homeowners through existing residential repair funds, while the public account is financed by the government through various channels.
Purpose of the System
The system aims to provide a stable funding channel for the safety and maintenance of residential buildings, particularly addressing the needs of older properties. It is being piloted in 22 cities across China.
Funding Source
Personal Account
The personal account is funded by homeowners through existing residential repair funds. These funds are typically used for repairs and renovations of shared facilities and common areas once the warranty period has expired.
The personal account funds are used exclusively for repairs and updates to shared facilities and common areas within residential complexes, ensuring the buildings remain safe and functional.
Public Account
The public account is funded by the government through a variety of sources, including fiscal contributions and land sale revenues. The goal is to establish a stable source of funding for building safety and maintenance without imposing additional costs on homeowners.
Public account funds are primarily used for regular building inspections and insurance coverage. They can also be used for emergency repairs and renovations that impact public safety, such as structural integrity issues following natural disasters.
No Additional Costs for Homeowners
The establishment of the house pension system does not require homeowners to pay additional fees. The public account is financed through government resources, ensuring that homeowners’ burdens are not increased.
Misconceptions Clarified
Is it a Property Tax? The house pension system is not a form of property tax. While some have speculated that it is a disguised property tax, experts clarify that the two are fundamentally different. Property tax is levied on the ownership of property, whereas the house pension system is designed to fund the maintenance and safety of buildings.
Background and Need
With a growing proportion of older buildings in urban areas, the need for regular maintenance and safety checks has become more pressing. Existing residential repair funds are often insufficient to cover the extensive maintenance needs of these properties.
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