An attempt by Democratic Party legislator Lee Wing-tat to introduce a punitive tax on property speculation was blocked because it would cost extra money. The President of the Legislative Council, Andrew Wong Wang-fat, accepted the administration's advice in ruling that Mr Lee's private member's bill would have a 'charging effect'. Under proposed amendments to the Stamp Duty Ordinance, anyone who sold a new flat for more than $3.5 million within two years of purchase would face an extra 10 per cent transfer tax. At present, buyers only have to pay 2.75 per cent stamp duty. The proposal also targets speculators who operate by transferring shell companies. Companies now pay stamp duty of 0.03 per cent. The proposed legislation said 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 transfer tax can be changed through a resolution passed by Legco. The ruling followed advice from Secretary for the Treasury Kwong Ki-chi, who said the bill could cost the Government $13.8 million a year. He said the Inland Revenue and Rating and Valuation departments would need more money to implement the bill. The authorities had also tried to block the bill by arguing that legislators were not empowered to change the tax rate. But that was rejected by Mr Wong.