China's new heavy tax on secondhand home transfers came into effect on Tuesday, Shanghai Securities News reported.

As speculators tried to evade the tax, home sales in big cities like Shanghai and Beijing had jumped in the past week, the paper said. Many property owners had rushed into the market to sell their second, or third apartments.

The government announced in late July that home owners would have to pay 20 percent of their net profits in individual income tax when selling as of August 1.

Analysts see the move as an attempt to curb speculation in the overheating property market and prevent housing prices from rocketing.

Housing prices in China have been surging at around ten percent year-on-year, and even faster in big cities.

With low-interest rates and few channels for investment, many wealthy Chinese bought apartments and waited for their appreciation. The speculation has driven up prices.

"For those speculators, a tax rate of 20 percent on the net profit is a huge blow," the paper quoted an unnamed real estate broker in east China as saying.

Statistics with Centaline China, a Beijing-based real estate agency, showed their home deals on July 31 were two to three times more than usual, according to the paper.

Home deals for the past four days account for two thirds of the total in July, the paper quoted an unnamed agent with Centaline China as saying.

However, some owners have turned to other options for their second homes, said the paper.

A survey by real estate agency Midland Realty showed about 30 percent of owners turned to leasing out their properties. Another 40 percent considered further raising the price of their apartments and maintaining the profit margin, the paper said.

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