BEIJING (Bloomberg) - China is preparing measures to counter a housing market slump and will roll them out if the economy needs support, people with knowledge of the matter said.

The government could reduce down payment requirements for second-home purchases, the people said, declining to be identified as the information is not public. Another possible step would be to let homeowners sell properties without paying sales tax after two years, down from five years.

China's new-home prices posted a record year-on-year decline in January, according to Bloomberg Intelligence analysis of government data tracking 70 cities. Implementation of the new easing policies will depend on whether an economic downturn continues or worsens, the people said.

The finance ministry did not immediately respond to faxed questions on the measures.

An interest-rate cut in November and the removal of some curbs have failed to revive the property industry. In September, the central bank allowed lower down payments and mortgage rates for some people applying for loans for second homes.

As a result of past efforts to curb property speculation and rein in price gains, minimum down payments for second homes are now at least 60 per cent.