The official announcement of new measures aimed at cooling the mainland's red-hot property market pulled no punches.
Prices, it said, were soaring and in the case of Shanghai they were shocking. The central government called on all regions to make stabilising the market a top priority. The package of new taxes and price-control mechanisms, which is to apply across the mainland, is a response to concerns which have mounted in recent months.
Previous attempts to rein in the property market have had a limited impact. In the first quarter of this year, prices rose 12.5 per cent overall compared with the same period in 2004. In big-spending Shanghai, prices went up 19 per cent.
A variety of methods have been deployed in a bid to cool the market. Last month, a pilot scheme was launched to impose a property tax in six cities, including Beijing. The idea was for this to be extended to the rest of the mainland later this year.
That step has been taken sooner than expected. It is a sign of the seriousness with which the central government regards the risk of a bubble bursting. It fears the impact of a property crash on the mainland's economy could be severe.
Speculators are the prime target of the new taxes. Owners of private houses who sell within two years of buying will be hit with business levies. Measures have also been introduced to discourage investors from allowing land to sit idle for too long, while waiting for prices to rise.
Boosting the supply of housing at the lower end of the market is another objective. Officials have been called upon to control strictly the price and the size of projects before authorising development.
