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Following a recent question in the Legislative Council on the effect of tax measures to cool the territory's housing market, Hong Kong's Secretary for Transport and Housing, Anthony Cheung Bing-leung, has disclosed the number of properties that have been subject to the Special Stamp Duty and the Buyer's Stamp Duty since the measures were introduced.
SSD is levied on any residential property acquired on or after November 2010 that is resold within 24 months. Originally, the rates of SSD ranged from 5 percent to 15 percent of the value of the transaction, depending on the holding period of the residential property concerned. However, to combat short-term speculative property investment, the Government announced the introduction in October 2012 of new rates of 10 percent to 20 percent. The relevant holding period was also extended to 36 months.
A monthly breakdown of residential property transactions involving SSD in Hong Kong between July 2011 and March 2014 has shown that a total of 3,473 transactions were subject to SSD of HKD654.4m (USD84.4m).
In addition to the SSD, also in October 2012 the Government introduced a BSD on residential property transactions if the purchaser or transferee concerned is not a Hong Kong permanent resident acting on their own behalf. The rate of BSD is set at 15 percent of the value of the relevant residential property transaction.
Following delayed approval of the legislation in February this year, BSD began to be collected in March 2014 with retroactive effect to October 2012. It was disclosed that, during that month, a total of 1,827 persons involved in taxable transactions had already paid BSD totaling HKD3.31bn.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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