Stamp duty cut and rates waiver to boost home sales
The reduction in stamp duty, and a rates waiver will stimulate the mass housing market, luring more potential buyers, say developers and property agents.
Cheung Kong (Holdings) chairman Li Ka-shing welcomed the reduction on stamp duty from 0.75 per cent for properties valued between HK$1 million and HK$2 million to a payment of HK$100, predicting that it would attract more buyers.
'It would especially benefit the buyers for small-capital flats,' he said.
The chairman of Shun Tak Group and president of the Real Estate Developers Association, Stanley Ho Hung-sun, also believed the measure would benefit the market.
Sun Hung Kai Properties vice-chairman Thomas Kwok Ping-kwong said the reduction in stamp duty and a rates waiver for two quarters would ease the burden on buyers, which would have a positive impact on the market.
The stamp duty proposal, which took immediate effect, will benefit about 30,000 homebuyers based on last year's transactions and cost the government about HK$250 million a year. It is also proposed to waive rates for the first two quarters of the new financial year, subject to a ceiling of $5,000 per quarter per property. This proposal will cost the government about HK$2 billion in 2007-08.
It is expected that 99 per cent of domestic properties and 86 per cent of commercial and industrial properties will have their rates waived for these two quarters.
Centaline Property Agency executive director Louis Chan Wing-kit said home transactions valued at below $2 million currently accounted for 61.2 per cent of the total number of housing deals.
The reduction in stamp duty and the rates waiver would cut the cost of property trading and that would encourage more people into the market, he said.
He expected housing transactions valued at below $2 million would increase to 4,500 deals this month, up 50 per cent from 3,000 deals last month.
The property agent also said a homeowner at Metro City Phase Two in Tseung Kwan O had raised the selling price of a 750 sq ft flat by 7.5 per cent to $1.45 million.
Ricacorp Properties said it had conducted a telephone interview with 294 potential buyers yesterday, of which 44 per cent said they were more eager to enter the housing market after the financial secretary announced the cut in stamp duty and the rates concession.
A total of 39 per cent of the interviewees said their decision would not be influenced by the stamp duty cut, while 17 per cent said they had no opinion.
Stephen Cheung Yan-leung, a professor of economics and finance at City University, said the measures announced in the budget would stimulate buying desire in the housing sector.