It would be feasible for China to launch a property tax in the near term because economic growth is sufficiently strong, a senior researcher with the Ministry of Finance said in remarks published on Friday.

Officials have said that they are stepping up preparations for a property tax, but have not said whether the plan would necessarily go ahead, as they seek to contain real estate prices to fend off a potentially dangerous bubble.

Jia Kang, the finance ministry's research director, said it was necessary to introduce such a tax, which home owners would pay annually based on the value of their property, because it would offer local governments a more stable source of revenue to support public services.

Such a tax would also help with the government's push toward more modest-sized homes and taming speculation in the market, Jia said, according to the official China Securities Journal.

However, any property tax should be introduced gradually, not in a one-off fashion, he said.

Beijing, concerned that rapid property price rises in many cities could be a precursor to a crash, has in the past weeks raised down payment requirements and mortgage interest rates for people buying second or subsequent homes, trying to tame speculation in the market.

Bank and property companies' shares have been hit by the measures, contributing to a sharp fall in the benchmark Shanghai Composite Index <.SSEC> over the past two weeks. It closed at 2,868.4 points on Thursday, a seven-month low. <.SS>

(Reporting by Rujun Shen and Jason Subler; Editing by Jonathan Hopfner)

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