Due to limited rates ranging from 0.5 to 1.2 percent, however, the taxes were seen as too low to be effective in keeping local housing prices in check.

Rumors later spread that more cities, including Wuhan, Hangzhou and Xiangtan, were "technically ready" to join the pilots, but none made any concrete moves, which some analysts have blamed on a lack of legal backing.

In a first sign of the central leadership's determination, a reform plan approved by the Third Plenary Session of the 18th Communist Party of China Central Committee in 2013 made clear that the legislation of taxes in the property sector would be accelerated.

As the country's growth started to face increasing downward pressure in recent years and the property market began to cool, discussions on property tax have gradually died down as more attention has shifted to supporting growth.

Balancing the relationship between the property tax's possible impact on the market and economic development will be central to the reform agenda, said Zhang Bin, a researcher at the Chinese Academy of Social Sciences.

"In the longer term, the aim of the property tax legislation is to increase taxes on home ownership to improve the price mechanism," he said.

Zhang Dawei, chief analyst at Centaline Property, pointed out another factor that may hamper the implementation of the tax -- property registration.

Given that property registration has yet to be finished, there will be a very low possibility of the property tax being implemented in the short term, which in turn will have limited impact on the market, Zhang said.

With a clear reform roadmap and transparent policies, the public could be more prepared for possible policy changes to help stabilize market expectations to avoid wild swings in prices, analysts said.

China's real estate market took a downturn in 2014 due to weak demand and a surplus of unsold homes. The cooling has continued into 2015, with both sales and prices falling and investment slowing.

The persistent weakness in the sector, combined with shrinking exports due to uneven global economic recovery, dragged China's growth to 7 percent in the first half of the year, prompting the government to introduce an array of policies such as easing mortgage rules and removing purchase restrictions to activate the market.

On the back of the policies, new home prices have continued to rise for the third consecutive month in July, with average prices in a sample of 100 cities rising 0.54 percent month on month to 10,685 yuan ($1,747) per square meter, according to a survey conducted by the China Index Academy, an independent research institute.