China Wednesday raised the minimum down payment requirement for the purchase of a second home to 60 percent of the property's value from the previous 50 percent, to curb property market speculation.

The decision was announced in a statement released after an executive meeting of the State council, China's Cabinet, which was presided over by Premier Wen Jiabao.

In cities where home prices are skyrocketing, strict measures should be implemented to restrict home purchases during a period of time, according to the statement.

Permanent residents with one home in a city can only buy another one, and only one home can be sold to non-permanent residents who can provide tax or social insurance certificates in the city.

No homes should be sold to permanent residents with at least two homes or to non-permanent residents with at least one home in a city.

Further, tax policies will be tightened in property purchases, the statement said.

The statement said local branches of the People's Bank of China, or central bank, will be permitted to raise down payment ratios and interest rates for second-home buyers based upon different home price-control targets set by local governments.

Local governments will be responsible for the stable and healthy growth of property markets and are required to publicize, before the end of March, the annual "controlled" price targets of newly-built homes, the statement said.

The targets should be set based upon local governments' economic development targets, disposable income growth and residents' housing affordability, the statement said.

Further, local governments should add effective land supplies, the statement said.

The move to raise the second-home down payment ratio is expected to affect the property market, said Guo, a professor with the Central University of Finance and Economics.

But in the future, the government will further tighten controls on the property market mainly through taxation, Guo said.

(Xinhua News Agency January 26, 2011)