Property shares index in Shanghai lost 2.3 per cent on Thursday on news that the government has put on its legislative agenda a long-debated property tax law. Not much is known about the contents of the draft law or even the definition of the so-called property tax - whether it is only a withholding tax or a much wider tax consolidating all property taxes and fees. The news comes at a time when the housing market enters its traditional slack season of July-August, further weakening sentiment. A final approval and enactment of the proposed property tax law is, however, remote. "We expect the launch of the property tax to take place after 2017," said Edison Bian, the head of China property research at UOB Kay Hian. The standing committee of the National People's Congress announced on Monday that it had included property tax law as one of the 76 items the top lawmaker aims to read or pass before its term ends in 2017. Eva Lee, a property analyst with UBS, said the government is unlikely to roll out the property tax this year or the next as it would go against the leadership's efforts to prop up a slowing economy. Some industry experts said the best time might have already passed. The consensus is that the country's housing market peaked in 2013 and that the industry is headed for a mild downturn in the next decade. Chinese families store the bulk of their wealth in real estate assets and almost all local governments count heavily on a booming property market to sell land and reap related taxes to drive economic growth. Investment in the real estate sector accounts for 15 per cent of gross domestic product. If the law increases the tax burden, it risks crashing the real estate market, already staring at a glut in the next three to five years. More importantly, it could have a ripple effect in banking and more than 40 other sectors, with dire implications for the broader economy. Bian said the new law would introduce a property withholding tax and reduce existing taxation in property transactions, keeping the overall impact neutral to the physical real estate market and the stock market over the long run. There is no nationwide property withholding tax on the mainland. The country began trials of such a tax in Shanghai and Chongqing in 2011. Some analysts said the effort was a failure as the programme was never expanded to other cities, as was expected. The two cities only tax those families with multiple, spacious or very expensive homes - at a low rate of 0.6 per cent in Shanghai and up to 2 per cent in Chongqing. The mainland has at present four types of taxes related to the property sector. Their combined amount grew 3.7 per cent in June from a year earlier to 168.6 billion yuan, after falling in the first five months of the year. Apart from that, individuals also need to pay capital gains tax, which varies from city to city.