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Beijing, Shanghai announce detailed property curbs (2)


09:27, March 31, 2013

Shanghai said besides enforcing the capital gains tax, it would apply greater scrutiny to borrowers who come from other cities, or are foreign or divorced.

Beijing said those who provide fabricated materials to buy apartments will not be registered for property ownership and will be banned from buying apartments in Beijing within 5 years.

The rules came after the central government rolled out a plan on March 1 to tighten control over the property market amid expectations of rising housing prices.

Among the measures, the central government announced a new capital gains tax of 20 percent on used home transactions, a move that has triggered widespread panic among both buyers and sellers. The new tax replaces the previous transaction tax of 1 to 2 percent of the final sale price.

The property market, particularly the used house sector, has since seen a large number of transactions amid worries that the new tax will push housing prices even higher.

"The curbing policies are designed to optimize the allocation of housing resources," said Chen Zhiwu, secretary general of the Beijing Real Estate Association.

The target of policy regulation is to make the housing return to its nature of residence, instead of investment object, Chen said.

The impact of buying control and differentiated credit policy will be limited but it will help stabilize the market expectation, said Zhang Dawei, chief market analyst with Beijing-based Zhongyuan Real Estate.

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