Commentators agree, empty flat tax is needed to kick-start selling
Number of empty flats not sold or leased by developers rose to 9,500 at the end of last year, nearly double the 5,000 registered at the start of the year
An expected interest rate rise in June is likely to force more developers and homeowners, alike, to dig in and not sell their new and second-hand flats, adding more pressure on the Hong Kong government to introduce a levy on unoccupied properties to increase supply, according to leading market watchers.
Hong Kong Financial Secretary Paul Chan Mo-po last month unveiled the government is considering imposing the tax, in a bid to cool the city’s red-hot property prices and make more properties available.
“It makes sense to consider such a tax, as Hong Kong has a real lack of properties, while some developers and secondary homeowners are holding back on selling some empty units,” said Clement Chan Kam-wing, managing director of accounting firm BDO.
“Many overseas cities such as Melbourne have imposed similar taxes in the hope of helping to increase supply and make prices more reasonable,” he said.
Chan said an empty flat tax may now be more urgent than ever, as a new interest rate cycle looks like developing.