'Still room' for more mortgage concessions

PUBLISHED : Monday, 01 March, 1999, 12:00am
UPDATED : Monday, 01 March, 1999, 12:00am

Property experts say there is still room for more mortgage tax concessions in a bid to help lessen the burden on low-to-middle income home owners.

But one warned it would be unwise to 'throw' taxpayers' money at expanding existing home loan schemes.

'I have to admit the Government has done a lot in the past year to rescue the property market which plunged dramatically in the economic turmoil,' Hong Kong Property's managing director Michael Choi Ngai-min said.

Home buyers can secure up to 85 per cent mortgages later this month by paying no more than a $300 monthly premium through the Mortgage Insurance Programme to reduce the financial risk carried by banks.

Hong Kong Mortgage Corporation is to announce details of the programme.

'What the Government could do is expand the home loan interest tax concession introduced last year from the present $100,000 to $200,000,' Mr Choi said.

A maximum of $100,000 in paid loan interest could be deducted from the total assessable income of taxpayers under a relief measure introduced by the Financial Secretary in his last budget speech.

'In the case of a $3 million flat, the home owner is paying about $20,000 a month solely for the loan interest for the first few years. The Government could do more on that,' Mr Choi said.

Tony Chan Tung-ngok, immediate past president of the Society of Hong Kong Real Estate Agents, said: 'Doubling the maximum loan interest from $100,000 to $200,000 is reasonable especially when speculators have already left the market.' Centaline Property Agency's managing director Shih Wing-ching called on the Government not to 'throw money' into expanding existing home loan schemes.

'It has been clear that people can more than often afford to own homes under the current flat prices. It's entirely a matter of confidence,' he said.

He called on the Government to keep the 10,000-quota for the Home Purchase Loan Scheme and 12,000-quota for Home Starter Loan Scheme.

Housing Society figures showed only 4,500 buyers had drawn loans from the body up to last week although more than 10,000 certificates of eligibility had been issued to potential buyers.