Only plush and spacious high-end residences will be targeted by the planned property tax, now being studied by the regulators in Beijing, sources said.

Families that own only one home with per-capita dwelling area less than 70 square meters will be left out by the new legislation.

An official with the State Administration of Taxation said on Saturday that it has received from Shanghai and Chongqing, two provincial-level governments, draft proposals on a new tax to be levied on local properties. The two cities are pioneers in applying for property taxation.

The official added that the ordinary people, who have only one home, "will not be affected" by the new tax.

The taxation is now hotly debated in China, with online opinion polls showing roughly equal proportions of Chinese residents who either support or oppose the levy. On the stock market, real estate developer shares have sunk on the news as investors believe the new taxation will have a negative impact on housing sales, and cut into the developers' revenues.

Property tax proposals submitted by Shanghai and Chongqing, are said to only target at high-end residences and owners who have more than one home, the Shanghai Securities Journal also reported on Saturday.

Beijing is pinning hope on property taxation to discourage investors to hoard housing, which is believed to have helped a steep price rises in urban housing in 2009.

People's Daily Online