CAPITAL gains from property and securities dealings in China will be put under the personal income tax category, making investments less attractive, according to an expert in mainland taxation. The move will raise combined taxes on property transactions to as high as 80 per cent. Arthur Ho, head of Price Waterhouse's China tax group, said detailed regulations for the individual income tax law would specify that capital gains in securities and property were taxable. Gains relating to the sale or exchange of property will be subject to a flat 20 per cent capital gains tax. A similar rate is likely to be applied to the disposition of marketable securities. China has already introduced a land appreciation tax under which tax rates ranging from 30 per cent to 60 per cent will be levied on gains generated by sale of property. Authorities have also declared they intended to introduce levies on dealings in stocks. Buyers and sellers of stocks would be required to pay a 0.3 per cent levy on each transaction. Mr Ho said an individual who disposed of real estate property would potentially be subject to both the land appreciation tax and individual income tax. He said: ''The introduction of the 20 per cent capital gains tax on transactions of property in China is definitely going to affect the return on investment for individuals investing in the China property market. ''In addition to the land appreciation premium of property gains tax, there is an individual income tax. The total tax cost might be significant. The rate of return might not be as attractive as before the introduction of the tax.'' Beijing is considering including in the individual income tax other kinds of income, defined as windfall gains tax, extending the taxable income to gains from securities transactions. Mr Ho said the capital gains tax on securities transactions was unusual. ''It is definitely very uncommon for any country to tax capital gains from dealings in securities. It means additional cost for investments in securities and it definitely will dampen the stock market if it is strictly implemented,'' he said.