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Provincial property guidelines 'very mild'

Provincial property guidelines 'very mild'

THE first provincial-level guidelines for strictly implementing property tightening measures were dismissed as weak and insubstantial by analysts yesterday.

On Monday, Guangdong became the first province in China to roll out its own guidelines.

In a statement, the provincial government said the cities of Guangzhou, Shenzhen, Foshan and Zhuhai must continue to enforce their home-purchase restrictions vigorously.

Guangzhou and Shenzhen should also report to provincial government bureaus with housing price control targets for this year by the end of this month, it added.

Areas where property prices are rising fast must implement a 20-percent capital gains tax as the central government required earlier, said the statement.

But some analysts were unimpressed with these measures.

"This seems to be a very mild version," said Sky Xue, an analyst with China Real Estate Information Corp.

"There is no clear requirements regarding the implementation of a capital gains tax, as the market expected earlier, and the provincial government hasn't mentioned anything about its policy involving home mortgages,"

"Moreover, we don't see any further tightening on home purchase restrictions either," added Xue.

The State Council, China's cabinet, announced on March 1 that it planned to levy a 20 percent capital gains tax on property transactions.

And banks may introduce higher down payments and mortgage rates for second-home purchases if price rise too fast.

Local governments are expected to release local guidelines by the end of this month.

Other industry figures were less critical of Guangdong's measures.

Yang Hongxu, vice director at E-House China R&D Institute, a major property services provider and research organization in the country, said the provincial-level guidelines were within his expectations.

"Actually, it was no surprise to me because I didn't really expect many 'details' in the provincial-level guidelines," Yang wrote on his blog on Sina.com.

"In the next few days, we may probably see Guangzhou and Shenzhen release their own city-level guidelines and that might include more detailed rules for real practice."

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