Measure to stop speculators gets mixed reaction A Guangzhou government decision to levy a tax of 20 per cent on second-hand property sales has drawn a mixed reaction from the market. The Guangzhou Land and Estate Management Bureau told Xinhua yesterday the government would levy a 20 per cent tax on all second-hand property transactions from January 1 in the most drastic measure yet to cool the city's booming property market. Property prices in Guangzhou have risen 16 per cent in the past 11 months and show no signs of cooling. Xinhua said the authorities estimated about 30 per cent of transactions were for short-term speculation, and they were worried rising prices would push up inflation and production costs and hurt the city's economic growth. The government warned that people trying to evade the tax would be subject to fines five times as large. Property agent Li Bin said some property prices had risen by more than 50 per cent over the past two years. He said the Shanghai government's decision to cool its property market had driven hot money into Guangzhou. 'In some good districts, such as those along the new metro line, property prices have increased by up to 70 per cent since 2002,' he said. 'I'd more or less expected the government to do something. Our business will be affected for sure, but I'm prepared.' Guangzhou resident Lo Bihua, who bought a flat in October, said she was not worried by the new policy. 'We bought the flat to use, not for speculation. I have no plan to sell my flat in the near future so the tax is not a concern. I won't lose sleep over that,' she said. Other potential buyers complained about the new measure and said it would only push up prices. 'The seller will definitely include the new tax in the price,' said Li Zhaomin, a sales manager in Guangzhou. 'In the end, it is people who are waiting to buy their first flat who will shoulder the tax. It is really unfair for us.'