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Speaking to the media after increased rates of ad valorem stamp duty (AVD) finally received the Legislative Council's approval, Hong Kong's Secretary for Financial Services, K C Chan, indicated that all of the Government's stamp duty measures should remain in place "indefinitely" to cool the local property market.
In addition to the increased Special Stamp Duty rate and the introduction in of a Buyer's Stamp Duty on residential properties purchased by those who are not Hong Kong permanent residents in 2012, the Government had also felt it necessary, in February 2013, to increase the cost of property transactions generally by doubling across the board the rates of existing AVD applicable to both residential and non-residential properties.
Chan said these measures are still necessary "to manage the excess demand and lead to a healthy market," and that "it is difficult to forecast how long these measures should stay in place due to uncertainties in Hong Kong and around the world regarding interest rate changes and capital flows."
He emphasized that the Government monitors such macroeconomic factors and the local situation closely, and that "the Government is committed to taking effective measures to manage the situation so that our market can develop in a healthy and sustainable way."A comprehensive report in our Intelligence Report series dealing with the issues raised by international property investment, and the possible taxation implications raised by such purchases, with an account of the likely (and some less obvious) potential countries for your consideration, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report15.asp
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