China on Monday announced a new series of steps aimed at cooling excessive price rises in a property market that it called disorderly and verging on the chaotic.
Among the measures, which take effect on Thursday, houses sold within five years of purchase will be subject to a business tax - levied at 5 percent - payable on the total sale price, Xinhua news agency quoted a circular from the State Council, or cabinet, as saying.
The same amount would be taxed on the capital gains of luxury housing even after five years had elapsed, it said. Speculation had swirled that the government would step up efforts to rein in real estate prices that have spiralled beyond the reach of many ordinary people in key cities.
The new measures follow a six-point directive issued by the cabinet, on May 17, requiring government agencies to tame property prices.
The circular cited by Xinhua on Monday said measures taken since last year had had only limited success in holding down property prices around the country.
"However, some of the problems faced by the property market have not been completely solved and house prices in a small number of cities are rising too quickly," Xinhua quoted it as saying.
The market was "disorderly and relatively chaotic", it said.
Nation-wide, urban property prices increased 5.6 percent from a year earlier in April, with prices of new homes up 6.4 percent.
But in some hot markets, prices have been rising at a double-digit pace, sparking complaints that have prompted concern among Chinese leaders.
Other measures outlined in the circular included raising the down-payment individuals must make to secure a mortgage to 30 percent from 20 percent now.
That rule applied only to housing larger than 90 square metres and not to individuals buying real estate for their own use, it said.
To ensure swathes of the population were not locked out of the market and to deter construction of big luxury flats, at least 70 percent of all new apartments must be no more than 90 square metres, the circular said.
The authorities would also continue to ban land issuance for the construction of luxury villas.
The circular also reaffirmed a requirement that property developers must finance 35 percent of a project themselves in order to qualify for bank loans.
Developers that do not begin construction within a year of the start-date outlined in their contract would be subject to fines. Those that do not begin to build within two years would lose their land-use rights, Xinhua said.
The government would also step up efforts to punish developers hoarding land to sell it at higher prices, it said.
It would fine developers or even revoke their licences if they were found guilty of serious speculative crimes, it said.
The directives were issued in the name of nine government agencies including the National Development and Reform Commission, the construction and finance ministries, the central bank, the China Banking Regulatory Commission, the tax administration and the statistics bureau.
Last week, the banking regulator said that China needed to significantly increase the down-payment requirement for mortgages on high-end homes and investment property as part of a drive to rein in bank lending.
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