Update: SHPROP now down 9 percent (11:50 p.m. ET)
The Shanghai Composite is off 2 percent and is being dragged down by property stocks. The Shanghai Stock Exchange Property Index (SHPROP) has tumbled 8.7 percent. (via @Bill Bishop).
China Vanke, a property giant, and Poly Real Estate Group are both down nearly 10 percent.
This comes after the government published an online notice stating that homeowners who sell their homes will be taxed 20 percent on the profit they make, according to Xinhua. The notice also allowed banks to charge higher interest rates on mortgages.
Remember, officials have been trying to maintain a firm grip on the real estate market, and the Chinese central bank has been draining liquidity from the interbank market. Some said this was to curb speculation, while others have argued that it was to offset the record injection for the Chinese New Year holiday.
Here's a chart from Bloomberg that shows how the SHPROP is doing:
Market update at 9:50 p.m. ET.
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