China has expanded trials for a property tax, a decision that pitches President Xi Jinping against deeply entrenched vested interests across an economy fuelled for decades by real estate development.

The state council, China’s cabinet, will expand pilot schemes to tax residential and commercial property in cities, according to an announcement by the National People’s Congress — the rubber-stamp legislature — on Saturday. The locations were not disclosed but rural households will be excluded.

The reform threatens to be far thornier to implement and affect a greater number of people than a regulatory assault that has been launched over the past year in the world’s second-largest economy. A property tax could alter China’s economic model, reshaping government revenue streams from land sales to taxes and deterring property speculation.