China will gradually accelerate property-tax reform this year as part of a general fiscal overhaul plan approved yesterday by the State Council, or Cabinet.

The plan, drafted by the National Development and Reform Commission, China's top economic planner, covers reform in reducing monopoly by state-owned enterprises in industries like electricity generation, reasonable price setting of natural resources and practical charges of environmental-protection fees.

It will revamp individual and corporate taxation, streamline the financial-regulatory regime, improve the social-security system and enhance the foreign-investment climate.

"The plan paints a broad picture of the outlook for China's economic and social reform," said Li Maoyu, an analyst at Changjiang Securities.

"Such a blueprint demonstrates the government's strong will to change, especially in sensitive areas such as the housing market," Li said. "However, it needs to be put in more details."

The NDRC has just clarified the issue of property-tax reform.

It denied a report last week citing a commission research fellow as saying China won't introduce a real-estate tax for at least three years.

The property tax refers to duties levied on properties for lease or investment instead of for buyers' live-in residences.

Tax in China is now only imposed during home sales and a property-ownership tax is regarded by analysts as one of the most effective ways to curb speculation in real estate.

During an interview with Xinhua news agency, the commission said it was working on a plan designed to promote the healthy development of China's property market.

The proposal is part of the 12th Five-Year Plan and will be released in the second half of 2011.

In yesterday's document there were no details of how the country would gradually accelerate property-tax reform.

Shanghai's plan to begin a property tax in residential real estate has been submitted to the central government for review, according to yesterday's China Securities Journal.

Shanghai may impose the tax on people with residential areas exceeding 70 square meters each, or a household with more than 200 square meters of living space, it said.

The city may also impose duties on people without residential permits and those who don't file income-tax declarations for three years or more, the journal said.

Shanghai was working on "stricter" rules than the central government's to cool its property market, Chen Qiwei, a spokesman for the city government, said last week.

China has already raised down-payment percentages and interest rates for second mortgages and curbed banks from granting loans for third homes.

However, the country's property prices are still rising even after the central government launched the crackdown on speculation to limit the risk of asset bubbles and keep housing at an affordable level.