Shanghai is considering restructuring its property tax regime in an effort to lower home prices and deter speculation in a red-hot housing market.
Following calls to cool property prices and make homes more affordable, the municipal government plans to adopt rates to be paid by homeowners in regular instalments over the lifetime of their occupancy.
The rates will constitute the primary tax for buying a home in Shanghai.
Property experts said the new tax - which is expected to be set at no more than 10 per cent of a property's value - would increase the cost of ownership but would not be enough to deter speculation.
Banking sources said the rates regime might come into effect next year and that only new home purchases would be affected.
A source close to the city government confirmed Shanghai was considering adopting a rates system. Higher rates would probably be charged for luxury apartments, while cheaper homes might be given a tax break.
Should it go ahead with the plan, Shanghai will be the first city in the mainland to adopt a rates regime.
