Shanghai is preparing to introduce a property tax to dampen speculation and curb spiraling residential housing prices, Bloomberg reported. Mayor Han Zheng said Shanghai will also expand its low-income housing projects by a further 5 million square feet. The mayor did not give specifics on the property tax, which is widely expected to be around 0.8%, but did say that housing prices in the city were "too high" and "severely distorted the living function of homes." Previous reports have indicated that Shanghai and Chongqing will be pilot cities for a new property tax on new homes and/or luxury property, possibly in the first quarter. Property prices in Shanghai and Chongqing rose 26.1% and 29.4% in 2010, respectively. China’s government has promised to speed up such tax trials to curb the country’s rising inflation.