Days after China’s State Council introduced a 20 per cent capital gains tax on home sale profits, Shenzhen announced even tougher measures for new flats. According to Cainxin.com , developers are now banned from selling flats at higher prices than the previous month. This means new flats will be sold at fixed, if not declining, prices throughout the year. Developers, who sold homes this month at higher prices than Feburary, said the city’s Bureau of Land and Resources refused to issue them with official documents. This left them in a dilemma. “Are we supposed to return the differences to buyers?” said a frustrated agent on Sina Weibo, China’s twitter-like service. People responded to the new measures with mixed responses on Weibo. “This is a serious breach of China’s constitution and company laws, and a violation of businesses' rights,” wrote economist and Beijing professor Dong Pan. “Shenzhen is going downhill and China is moving further away from the rule of law,” he said. “Shame on Shenzhen - the pioneer of China’s economic reforms,” said another blogger. But others diagreed with Dong Pan. “I can’t afford to buy a single flat while blocks of new buildings are being bought by speculators and unused,” said one blogger, Since the announcement of the 20 per cent capital gains tax earlier this month, China has seen a surge in transactions in major cities. Home sellers rushed to sell them before the new tax takes effect. A district tax centre in Beijing was so overwhelmed with sellers they adopted a reservation system which gives out 180 numbers a day. This has failed to meet the large number of demand. A Beijing resident told SCMP.com he had to pay 1500 yuan to a "middle man" for a hard-to-get number at the tax center. He said he believed this man was probably working with tax office staff to make a profit. Some cities have also reported an increase in the number of divorces. This is a way some couples use to by-pass the new tax aimed at the sale of a second property belonging to a couple, according to media reports.