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Hong Kong May Need Stamp Duty Cut: IMF

by Mary Swire, Tax-News.com, Hong Kong

17 December 2015


The International Monetary Fund (IMF) has concluded in its recent 2015 Article IV consultation that Hong Kong has continued to demonstrate "prudent fiscal management," but that reduced stamp duties could soon be necessary to support its property market.

The IMF noted that Hong Kong's present counter-cyclical fiscal measures for households and small businesses, including tax reliefs, are expected to boost economic activity. However, the IMF recommended that "the 2016/17 Budget should proactively provide even greater support than currently envisaged" if the territory's economic growth prospects decline.

On Hong Kong's measures to control volatility in the property market, the IMF said "there are now early signs of another pause [in property prices], with momentum in the secondary market for residential property beginning to wane." It said that while the Buyer's Stamp Duty (BSD), Special Stamp Duty (SSD) and doubled ad valorem stamp duty (AVD) "will help filter out speculative transactions and thereby exercise restraint on excess demand, adjustments to these duties could be considered in the event of a sustained decline in transactions volumes with the potential to generate adverse spillovers to the broader economy," it said.

TAGS: tax | investment | real-estate investment | fiscal policy | real-estate | budget | International Monetary Fund (IMF) | stamp duty | Hong Kong

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