The New Paper takes a look at some possible measures which could be used to curb an overheated market. Financing What: In 2005, the Government relaxed rules on lending to let private home buyers borrow up to 90 per cent of the property value. That allowed new home buyers who would otherwise not have been able to afford the 20 per cent down payment on a home to enter the market. To cool the current market, the Government could consider removing this or even imposing a maximum 70 per cent loan quantum. Possible impact: May affect speculators who take up such loans because they have to come up with more cash. Capital gains tax What: A tax on the gains (or profits) from the sale of property by individuals or companies. The gains will be treated as income and taxed at the appropriate individual or corporate tax rate. Currently, no such tax exists. Example: You buy a place for $1 million and sell it for $1.2 million, with a profit of $200,000. That full amount (your profit) will be taxed if the property is sold within a year of purchase. This was introduced in 1996 as one of the anti-speculation measures, but was removed in 2002. Possible impact: It's a drastic measure that will hit both speculators and investors hard. Property counters will be hit and it will have a negative psychological effect on investors. Demand will drop and property prices will be affected. Speculators will stay away because their net profit will be reduced. Raise property tax What: Increase property tax (now at 10 per cent for non-owner-occupied residential properties). Impact: Will hit speculators and investors. Owner-occupiers pay less tax at 4 per cent. Double stamp duty What: Make both buyers and sellers pay stamp duty. Currently, only buyers pay stamp duty, which is about 3 per cent of the transacted price. Possible impact: Another measure that will hit speculators and investors because they will need to pay this amount when they sell. This article was featured in the New Paper November 14, 2009.