Please enter your email address to receive a password reminder.
Log into Tax-News+
Hong Kong's Secretary for Transport and Housing, Anthony Cheung Bing-leung, has said "there have been signs of cooling off in the residential property market" after the introduction of the further stamp duty increase on November 4, 2016.
A new flat rate of 15 percent was introduced in place of the ad valorem stamp duty (AVD), which was chargeable on all transactions for residential property acquired by non-Hong Kong Permanent Residents (HKPRs).
To accord priority to the self-use home ownership needs of HKPRs, the new measure has continued to adopt the exemptions provided for under the existing stamp duty regime. These provide that a HKPR buyer who is acting on his/her own behalf and is not a beneficial owner of any other residential property in Hong Kong at the time of acquiring residential property will continue to pay AVD under the lower rates.
"The new measure," Cheung said in reply to a question in the Legislative Council, "increases the transaction costs and thereby reduces investment demand for residential properties, which in turn helps cool down the housing market and guard against further increase in the risks of a housing bubble."
He said there were 3,550 and 3,286 transactions involving private flats in December 2016 and January 2017, respectively, representing a drop of about 50 percent as compared with the monthly average of 7,055 from September to November 2016.
In addition, the latest overall price index for private domestic flats showed a 0.07 percent rise in December 2016, much lower than the monthly increase before introduction of the new measure of about three percent each month.
Around 400 residential property transactions were subject to the new 15 percent AVD in December 2016 and January 2017. Previously, there were 2,350 transactions subject to the tax from September to November 2016.
On being asked whether the Government will review the new measures on a regular basis with a view to relaxation or abolition of the new measures, Cheung confirmed that he will "continue to closely monitor the property market movements and the ever-changing external conditions."
"The Government will make reference to a series of indicators, including but not limited to property prices, home purchase affordability ratio, transaction volume, flat supply, and changes in local and global economies," he said.
IMPORTANT NOTICE: Wolters Kluwer TAA Limited has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
All rights reserved. © 2017 Wolters Kluwer