Photo taken on Jan 1, 2015 shows an apartment project in Huzhou, East China's Zhejiang province. [Photo/Xinhua]

The Chinese leadership has decided to ease the housing credit policy to boost the property market and to add fuel to overall economic growth.

The central bank, the People's Bank of China, cut the minimum down payment for second homes to 40 percent from 60 percent on Monday.

The bank said the policy is designed to improve the living standards of buyers who have not paid off their existing mortgage but are buying a second home.

The Ministry of Finance said in a separate statement on Monday that it is easing taxation on home sales.

Sales tax on pre-owned homes sold two years or more after purchase will be canceled, the ministry said. Since 2011, owners selling homes within five years of purchase had to pay such taxes.

Chinese property stocks surged the most in six years on speculation the government would ease real estate curbs. The Shanghai Property Index was up by 7.3 percent at the close, its biggest gain since March 2009.

The Shanghai Composite Index rallied by 2.6 percent, or 95.47, and closed at 3,786.57, marking a peak since 2008.

Yu Jingbo, vice-president of China Construction Bank, said it is researching mortgage policies, adding, "We will make progress on the issue as soon as possible."

Analysts said the new policies are the "weapons" mentioned previously by Premier Li Keqiang to stabilize growth and to ensure the persistent economic slowdown does not fall below the bottom line－which is economic growth of about 7 percent this year.