Tsang announced a doubling of stamp duties for homes and non-residential properties valued at more than HK$2 million and it was announced that buyers of non-residential properties would be required to pay stamp duty earlier.

Instead of paying upon conveyance, the payment should be made once the sales agreement is signed to reduce the incentive for speculation. For flats valued at HK$2 million or less, stamp duty will increase to 1.5 per cent of the transaction value - up to 300 times the current flat rate of HK$100. The measures aim to tackle speculation on small to medium-sized flats, parking spaces, shops and hotels.

They come just four months after the government announced additional stamp duties to cool demand from non-locals and companies. Tsang admitted he did not have a "silver bullet'' to deal with the housing problem "in one shot". "We are doing it in an incremental manner," he said. "We have done a number of management measures while we are increasing the supply of flats in the market.

"We'll just continue to do that, and if we were required to do more I will not hesitate to add more measures to make it effective.''

Permanent residents who are first-time buyers or who sell their only flat and buy another within six months will be exempt from the increased duties. Increasing the stamp duty on flats is likely to affect half the local buyers on the market, who already have more than one flat.

Tsang said: "The market's exuberance has regained momentum in January this year. The property price increased by 2 per cent in January, and the momentum is continuing this month."

Tsang, who introduced the last set of cooling measures in October, also warned that the city's average debt-to-income ratio could shoot up to 68 per cent, from the 52 per cent in the fourth quarter last year, if interest rates were to go up by just 3 percentage points.

To reduce risks resulting from a possible interest rate rise, the Hong Kong Monetary Authority also further tightened mortgage arrangements yesterday for non-residential properties such as parking spaces.

Banks must assess borrowers' ability to repay with an assumption that interest rates will go up by 3 percentage points instead of the current 2 percentage points.

The new measures came four days after 360 hotel units owned by developer Cheung Kong were snapped up by hundreds of buyers, many intending to convert them into flats.

Government statistics show that the price of large flats - those over 160 square metres - decreased by 0.7 per cent in January compared with December, but prices of small to medium-sized flats - smaller than 100 square metres - increased by 2 per cent.

Ringo Lam Chun-chiu, valuation director at the surveyors AG Wilkinson & Associates, expects the latest measures to reduce transaction volumes and prices for all types of property in the short term.

Paul Fan, branch manager of Centaline Property Agency, expects a drastic drop in sales transactions. "It will deal a serious blow to our business. We [property agents] may need to apply for Comprehensive Social Security Assistance soon," he said.

Measures to curb overheating of Hong Kong property market

Signs of overheating

Overall, housing prices have rallied by 120 per cent from 2008 and %34 per cent from their peak in 1997.

Prices for retail, office and factory space surged year on year by 39 per cent, 23 per cent and 44 per cent respectively in 2012. Compared with 2009, sale prices for these properties have soared between 148 per cent and 202 per cent.

New measures

Doubling stamp duties across the board for both housing and non-residential properties. The highest rate of stamp duty will be doubled from the current 4.25 per cent to 8.5 per cent.

Stamp duty for properties valued below HK$2 million will rise from HK$100 to 1.5 per cent of the transaction value.

Permanent residents who are first-time buyers and who do not own any other residential property at the time of purchase will be exempt. Stamp duty for transactions of non-residential properties, including offices, retails and car parks will have to be paid after sales agreements are signed.

In stress-testing applicants' repayment ability, banks must assume a mortgage rate rise of 3 percentage points, instead of 2 points.