A man walks past a construction site in the Pudong New Area in Shanghai, January 17, 2007. [newsphoto]

"Some developers may suffer great pressure once the tax is formally collected," Xiao Li, secretary of board of the Shenzhen-based developer China Vanke Co, Ltd, told the Shanghai-based newspaper.

"Vanke had set aside 300 million yuan (US$37.5 million) by 2006 in preparation for the reintroduction of the tax," Xiao said.

In 2006, the price of newly built commercial houses in many Chinese cities saw a year-on-year increase of more than 10 percent, despite government policies aimed at stabilizing prices.

Investment in China's real estate sector surged 24 percent year-on-year in the first 11 months of 2006, three percent higher than that of the first quarter.

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