Beijing imposes stiff rule to fight rising property prices

Beijing will require non-local residents to prove they have paid taxes in the city for five years before they can buy a home there - the strongest measure it has taken so far to curb runaway prices in the capital.

'The rule will pour cold water on the market immediately since non-local residents account for about 60 per cent of the capital's transactions,' said Kenneth Pak Kei-yuen, a senior general manager in the Beijing office of Hong Kong estate agency Midland Realty.

Other cities require homebuyers who are not local residents to produce proof they have paid at least one year of taxes, but Beijing is the first to demand five years of records in its effort to prevent a housing bubble.

Following the State Council's call to cool the overheated market, the capital will also ban non-local residents from buying second homes and prohibit local residents buying more than two flats, China Central Television reported yesterday.

Pak said the volume of property sales in Beijing this month was down 60 per cent from last month.

'It is the harshest measure to curb property investment,' said Dickson Wong Hung, the chief executive for the mainland of another Hong Kong agency, Centaline Property. 'Even if you want to buy with cash, you are not allowed to do so if you have exceed the limits on home purchases.'