FOR Janet Jin, a 35-year-old white-collar worker in a multinational company, the past week was filled with joy and pride because her 11-year-old daughter was accepted for admission to a respected middle school in Shanghai. Now if only the family could have equal success in the search for an apartment to buy.

The family wants to move to a neighborhood closer to their daughter's new school because their current residence has no convenient -public transportation links to it. That task took on bit urgency after the Shanghai government said it will levy a property tax on larger, newly purchased homes.

Details of the new tax, part of a national pilot project on property levies to rein in real estate speculation, haven't been made public, so Jin isn't sure just how much time she has to get into the housing market ahead of the tax.

"There has been growing speculation that the property tax will soon be levied," Jin said, "and it could affect properties purchased in the second quarter. I'm afraid that we won't have much time if we want to conclude the deal before then."

Shanghai Mayor Han Zheng last Tuesday told local lawmakers that the tax will be levied soon but didn't specify when or at what rate.

Shanghai is one of two cities in China implementing such a tax on a trial basis. The other city is Chongqing located in -southwestern China.

Chongqing is planning to aim its tax at high-end housing, both newly purchased and existing. Shanghai's tax will target only newly purchased more spacious houses. Specifics about how "spacious" will be defined haven't been made public yet.

Many industry analysts are speculating that could mean 60 square meters or more, on a per-capita basis. Some are guessing the minimum may be 70 square meters.

All properties owned by family will be used to calculate living space on a per-capita basis. Anything above the minimum threshold is expected to be taxed at between 0.5 -percent and 0.6 percent.

Family affairs

Adding up the total housing space a -family owns would be triggered only in instances where a property is purchased after the tax is imposed.

For example, a three-member family that owns a 90-square-meter apartment and buys a second 150-square-meter townhouse after the property tax is implemented would face a levy on a per-capita excess of 20 square meters if the threshold were set at 60.

If, on the other hand, the same -family were to own three houses totaling 500 square meters and didn't buy property after the tax was levied, it would pay no -property taxes.

Jin, who currently lives with her husband and daughter in a 100-square-meter apartment near the city's Middle Ring Road and owns a 220-square-meter villa under mortgage in an outlying area of the city, would likely face property taxes if she moves to a new location at least as large.

"I plan to sell our current house and buy a new one with the cash because mortgages on third-home purchases have been frozen in Shanghai already," said Jin. "And in my case, as far as we keep the villa, the per capital space has already exceeded 70 square meters anyway, so I need to be really quick sealing a deal in order to avoid paying the tax."

The pending property tax is causing headaches for homeowners across Shanghai. It comes just months after a series of tightening measures by the central government including twice-raised interest rates in an attempt to stem spiraling home prices. The increases, so far, don't seem to have damped the speculation fever in real estate.

New housing prices in the city last month stood at a record average of 24,176 yuan (US$3,673) per square meter, up 7.6 percent from November and up 21 percent from -January 2010.

Real estate industry analysts are expressing doubts about whether a property tax will succeed where rate increases haven't.

"I don't think it is an appropriate time now, or even within the coming few years, to introduce the property tax," said David Chen, senior director of Residential Project Marketing at CB Richard Ellis China.

"It would perhaps be better for the -government to closely observe the real estate market for some longer period of time because we expect the lag-effect of existing tightening measures to gradually filter through to the market after the first quarter of 2011," he said.

Government action

Others say that the government is fishing in the wrong pond for a solution to the -housing bubble.

"Until the twin issues of alternative investment channels and minimal asset carrying costs on residential property are addressed, the residential price correction sought by the central government will not occur," said Michael Cole, director of research for East China operation at Colliers International, a major real-estate services provider.

The relatively low tax rate expected for the property levy signifies to some that the impact will be equally small.

"Though final details of the tax, including the rate and tax-free threshold, have yet to be announced, a property tax of this kind seems to be mainly aimed at restricting home -purchases rather than adding to the holding cost of -assets," said Song Huiyong, research director with Shanghai Centaline Property -Consultants Ltd, operator of the city's largest real estate chain.

"As the mayor has already said, Shanghai will stick to its existing tightening policies, including restricting families to buying just one new home," he said. "It doesn't make too much sense to me why we need to launch such a 'mild' property tax."

In a latest online survey conducted by the real estate website Soufun.com, half of the respondents said they oppose the property tax because they don't think it will help curb housing prices and will only add further financial burdens to home buyers.

While the debate rages, people like Jin and her husband are scurrying to buy a home ahead of the tax.

Sales of existing homes have picked up- -notably since late December, with units larger than 130 square meters extremely popular in many areas across the city, according to a latest study released by 21 Century China Real Estate, one of the city's leading real estate chains.

"It's quite understandable, since only newly purchased homes will attract a property tax, but I do believe that the tax will gradually be expanded to existing homes in the future," said Shao Minghao, research head of Shanghai Hanyu Property Ltd. "But that might take as long as a couple of years."