Shanghai limits buyers to one new apartment

The Shanghai government has issued new rules to limit home buyers to one new apartment and will impose revised land appreciation tax as part of an effort to rein in property speculation, local media reported on Friday.

Every family in Shanghai will be permitted to buy only one more home, regardless of whether it is a second-hand unit or newly built apartment, according to the new regulations.

Shanghai authorities also said on Thursday it would limit the amount of mortgages banks can issue on residences and prepare to introduce a property tax.

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It has ordered banks to suspend loans for third-home buyers and non-local buyers who cannot prove they had paid personal income taxes or made social security contributions in the city for at least one year, the statement said.

The new rule, which comes six months after Beijing introduced similar measures, came into effect on Thursday and it is unclear how long the regulations would remain in place.

The city said it would also impose a land-appreciation tax of five percent on property developers if the residential units were sold at an average price that was more than twice the average price of homes sold in the same area the previous year.

The southern city of Shenzhen, bordering Hong Kong, said earlier this week that local families that owned two housing units or more would be prohibited from buying any additional ones.

Source : Reuters – 8 Oct 2010

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