The report adds that pilot plans and the gradual introduction of property tax would help boost local governments' finances and wean them off a dependence on land sales.

As a sustained and long-term source of income, property tax may supplement fiscal revenue to a certain extent and promote a more conservative approach to use of land resources. However, it would take some time for the levy to come into effect, and initially, revenue may pale in comparison to that received from land sales, the report said.

Macdonald said: "Property taxes are long-term mechanisms for developing healthier markets. If the tax base can be equitable with a progressive tax rate system, and the proceeds can be used for providing local services, this will prove positive for the market and society in the long run."

Given that this is a new tax, there may be some initial resistance and market disruption, but if the levy is introduced gradually, and clearly communicated, the impact should be manageable, he added.