Abstract: Property tax has a broad impact on urbanization, fiscal sustainability and housing market, it is the key for China government to establish a modern governance system also. The positive impact of introducing property tax including several aspects. First, it provides price signal to reallocate land resources, thus decrease the need of government intervene and compiled destruction. Second, it could increase revenue for local governments, and give incentive for them to adjust functions. At last of this paper, there are some advices for levying property tax in practice.
Key Words: Property tax; Public governance; Intergovernmental relationship