Two new measures to cool the property market will be introduced to reduce immediate demand, John Tsang, Financial secretary of the Hong Kong Special Administrative Region (HKSAR) government announced Friday.

The ad valorem stamp duties on both residential and non-residential properties would be doubled across the board. For transactions valued at two million HK dollars (about 258 thousand U.S. dollars) or below, the stamp duty will rise from a 100 HK dollars flat fee to 1.5 percent of the transaction's consideration. Tsang announced the measures at a press conference held Friday afternoon.

"We shall grant exemptions similar to those available in the existing Special Stamp Duty and Buyer's Stamp Duty regimes. The new stamp duty rates will not apply to Hong Kong Permanent Resident buyers who are not beneficial owners of any other residential property in Hong Kong at the time of acquisition of a residential property," Tsang said.

Under a new arrangement, stamp duty on a non-residential property will be charged on a sale and purchase agreement, instead of the current practice of charging it when a conveyance on sale of the property is executed.

"I expect it will help forestall any possible shift in exuberance from the residential market to the non-residential market," Tsang said, adding the two measures will take effect after midnight tonight. "Sale and purchase agreements signed today or previously will not be affected."

In October last year, the HKSAR government introduced two new measures -- increasing the Special Stamp Duty rate and extending its restriction period, and introducing the Buyer's Stamp Duty. Transactions in November and December 2012 plunged sharply as speculative activities and non-Hong Kong Permanent Residents' demand subsided.

The market regained momentum in January. Property prices rose 2 percent in January, and have continued to rise. Prices have increased 120 percent compared to 2008. The affordability ratio rise to 52 percent in the fourth quarter last year, and this ratio would rise to 68 percent if the interest rates were to go up by just three percentage points.

The price of non-residential properties has also soared. In 2012, the price of retail space surged 39 percent, offices 23 percent and flatted factory space 44 percent.

"We shall introduce the necessary legislative amendments to the Legislative Council as soon as possible. I hope that the Legislative Council will agree to empower me to adjust the value bands and rates of both the existing and new ad valorem stamp duty by means of subsidiary legislation so that adjustments can be made in a timely manner," Tsang said.

Tsang believes that the two new measures, together with the enhanced flat supply, will help cool the property market, adding he would not hesitate to introduce further measures.

The new measures' introduction shows the HKSAR government has been monitoring the property market, which will affect the financial system and the overall economy, Chief Executive CY Leung said.

"If the market continues to get overheated, we will introduce further demand-side management measures in a timely manner," Leung added. Endi