The Democratic Party will move a private member's bill to introduce a punitive tax on property speculation. Under proposed amendments to the Stamp Duty Ordinance, anyone who sells a new flat within two years of purchase for more than $3.5 million will face an extra 10 per cent transfer tax. At present, people only have to pay 2.75 per cent stamp duty. The proposal also targets speculators who do business by transferring shell companies. Companies now pay stamp duty of 0.03 per cent. The new legislation says 10 per cent tax should be levied on the transfer of a 'landholding company'. A 'landholding company', under the bill, means a firm with a property valued at more than 80 per cent of its total stock. The rate of the transfer tax can be changed through a resolution passed by the Legislative Council. The Government announced new anti-speculation measures on Wednesday. They include limiting company buyers to the last 15 per cent of each batch of flats on sale and ensuring 10 per cent of flats reserved for internal sale are bought by genuine end-users. Party legislator Lee Wing-tat said his bill could help dampen speculation. 'This proposal will increase the cost for speculators but will not affect the real users,' he said. 'People who buy through shelf companies should be subject to the same tax as individuals. It also provides enough flexibility. 'The tax rate can be reduced when legislators consider property speculation is not serious.' Mr Lee yesterday presented the draft bill to the Commissioner of Inland Revenue Wong Ho-sang, who will study the proposal. Mr Lee said they would pass the proposal to the Housing Branch and the Real Estate Developers Association.