A property agent displays ads at a housing agency in Chaoyang District in Beijing yesterday. The city's property owners said they don't plan to pay rental income tax, which will become compulsory from Jan 1. [China Daily]

Real estate agents are advising property owners that they don't have to pay tax on rental income, despite a government regulation ordering that they do so.

According to a regulation from the State Administration of Taxation in mid November, landlords and anyone who profits from subletting houses have to pay tax.

However an investigation by METRO has revealed that homeowners are being advised to break the law by some real estate agents.

METRO was told by five different companies in Beijing yesterday that there was either no law governing income tax or that it was unnecessary to abide by it.

An agent from a well-known real estate agency said there were ways of getting around the regulation.

"You don't need to pay the tax unless you report yourself to a tax official," he said.

People definitely have to pay taxes once they let tax officials know that they are making money, he added.

Meanwhile, an agent from another successful real estate agency said that there are too many people renting and letting houses in Beijing and the government did not have time to bring everyone under control.

"That is something you don't need to worry about," he said, when METRO called his office, under the guise of being a property owner.

Li Ji, from 5i5j real estate agency which currently owns about 350 outlets in Beijing told METRO: "In our company, we always remind every landlord to pay taxes, but whether they pay it or not is not our business."

Li said Beijing's letting market is huge and it is very difficult to estimate how many houses are being rented. She believed that the houses rented through real estate agencies are less than 20 percent of the whole letting market.

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However, another agent at the company who worked at a different branch in Changping district said it was unnecessary to pay the tax.

A property owner surnamed Jia said that in theory people should pay taxes on income derived from rent.

However, Jia said she receives 1,800 yuan per month by subletting two rooms of her house and has never paid tax.

"It is impossible for people like me to get caught. Even if we get caught, the tax official can hardly find evidence," she said.

Wang Xuefei, a woman who rents a 12 sq m room in Xuanwu district, said she was not sure whether her landlord pays tax or not, but she never asked for invoices.

Sohu.com reported that Beijing has a migrant population of 5.1 million, and that the demand of renting houses in Beijing is huge.

By October, nearly 20,000 houses had been rented this year. The average price in Beijing is 2,210 yuan per month.

There are no official statistics on the number of houses currently available to rent, but about 547,000 houses were found during a search on Sofang.com, one of the most popular online renting agencies in China.

According to Beijing local taxation bureau, landlords in Beijing have been required to pay 5 percent of their income to tax officials since February 2007.