HONG Kong property developers working on the mainland have had to postpone their listing plans because of the newly introduced capital gains tax, said Ernst and Young partner Conway Lee. Mr Lee said he knew of several developers working on projects in China who had been caught off guard by the capital gains tax which was introduced last December and came into effect from the beginning of this year. The tax, which is supposed to replace the land appreciation tax, has not yet been implemented because there is confusion on how to apply the tax. Mr Lee said Hong Kong developers had not budgeted for the tax and so their profits would be adversely affected. Until the situation was cleared and proper estimates of budgets could be made, those developers could not proceed with their listing plans. ''Hong Kong property developers have definitely had their plans put on hold. I know of one developer who wants to raise $100 million through a new listing but now has to wait,'' he said. ''The flotation process is on hold because there is not enough profit after the provision of capital gains tax because it has not been budgeted for,'' he said. Mr Lee said there was still substantial disagreement between the provincial government and the central government in Beijing on how the tax would be implemented. Hong Kong investors are lobbying Beijing for a quick decision but insiders believe the implementation rules will not be issued for a considerable time. The Shenzen Land Bureau is still collecting taxes under the old system, but developers are holding off from committing new funds until the tax system is cleared up.