China has announced fresh measures to support the ailing property market. These include cuts in taxes for real estate sales as well as policies to make it easier for developers to obtain credit.

On Wednesday, a statement on the central government's website said housing may be sold free of business taxes after just three years, rather than five. Also, taxes will only be levied on the profit, not the total price. The tax rate is 5 percent.

The State Council said it will allow people to buy second homes on the same preferential terms normally reserved for those buying their first homes.

The cabinet encouraged financial firms to provide services and funds to help developers undergo mergers and acquisitions.

In addition, the government said the measures would address the difficulties of 7.5 million low-income urban families and 2.4 million households living in low-income housing in the next three years. Rural homes in dangerous conditions will also be renovated.

Analysts say these new moves are much more significant than those announced in the past few months. Combined with expectations of further reductions in interest rates, they are likely to help stabilize the property market.

The People's Bank of China said on its website that developers who build low-rent housing could enjoy a 10 percent discount on lending rates. These lower rates would be effective starting January 2009.

(CCTV December 18, 2008)