After discussing macro-control policies in the executive meeting of the State Council on Feb. 20, the General Office of the State Council published detailed rules of the policy.

Three regulations have attracted wide attention. First, is that property owners may have to pay up to 20 percent toward personal income tax, second is the coverage of the purchasing quota may be extended to the suburbs, and third, that down payments and loan interest rates may rise 15 percent on the benchmark interest rate.

The regulation that property owners would have to pay 20 percent personal income tax has triggered a flood of second-hand transactions. According to local reports, second-hand property transactions have increased by 30 percent to 40 percent in the two days since the publication of the rules last Friday.

Calculations from Centaline show that the selling cost of property may increase by more than 100,000 yuan. For example, on a 2 million yuan property bought more than five years ago, an owner would have to pay for 1 percent, or 20,000 yuan of the total selling price as a personal income tax, but according to the new regulation, if the house was bought for 500,000 yuan—which is common for properties bought five years ago—owners will have to pay 300,000 yuan as income tax.

An analyst of 5i5j.com said that the personal income tax means a down payment rising from 30 percent to 45 percent for cities where property price rose too fast, and the tax will influence many people wishing to improve their home living standards.