China's Guangdong region first to enforce government property cooling measures

GUANGZHOU (REUTERS) - The southern Chinese province of Guangdong will be the first province in the country to implement strict property cooling measures introduced earlier this month by the central government, the provincial administration said late on Monday.

The cities of Guangzhou, Shenzhen, Foshan and Zhuhai must "strictly implement" the central government's new property rules which seeks to impose a 20 per cent capital gains tax and higher down payments for second-time home buyers, said the notice posted on the provincial government's website.

Other regions where property prices are rising fast must also implement this capital gains tax policy, the government said.

Some regulatory bodies have also asked rural banks to ensure that fewer home loans are granted this year than last year, the official China Securities Journal reported on Tuesday, quoting sources.

Guangzhou and Shenzhen must also report to provincial government bureaus by the end of the month their 2013 building plans for new commercial housing and plans for housing price controls.

China's cabinet announced on March 1 that it planned to introduce a 20 per cent capital gains tax and higher down payments and mortgage rates for second-time home buyers in cities where prices are deemed to be rising too fast.

The measures come as China's new home prices rose in February from a year ago for a second consecutive month.

Wealthy Chinese tend to park money in property because they have few other investment options.

Chinese home prices more than doubled in 2009 after Beijing rolled out a massive economic stimulus package to combat the global financial crisis.