Advertisement
Advertisement

Change way property is taxed to ease supply and prevent hoarding

Homes should be built and owned solely for people to live in and not as a means of making money, at least until there are enough affordable housing units built.

Homes should be built and owned solely for people to live in and not as a means of making money, at least until there are enough affordable housing units built.

Hong Kong people squabble over democracy, politics and social issues, but many are deprived the most basic right of having a roof over their heads.

Chinese University's recent quality of life index found that a typical Hong Kong household would need to save for 14 years to buy a 400 sq ft flat in Kowloon.

Prices keep rising as supply is suppressed from development restrictions, political interest and high land price policies.

Easy monetary policies are making landlords richer, enabling them to buy more property and continuing this vicious cycle.

Singapore is smaller than Hong Kong and does not have the dollar peg to blame for its high property prices, but its government ensures home ownership, at 92 per cent, versus Hong Kong's 50 per cent.

Rising property prices do not create more property, and do no good for society; unlike the spillover effects of investments in technology, universities or hospitals.

Hong Kong is becoming uninhabitable and many who can afford to do so are leaving.

Bringing down price levels in line with salaries through transfers and taxation would reduce the wealth gap and provide funding for other social initiatives.

The property inheritance tax abolished in 2006 under Donald Tsang Yam-kuen's administration should be brought back; perhaps at 25 per cent - in line with most developed countries. A higher rental income tax should be imposed, as well as a yearly capital gains tax on investment property.

Tax exemption should only apply to a person's primary residence. Landlords owning multiple properties should be taxed to encourage them to sell; this would solve the problem of property hoarding and provide immediate supply.

The government should also restrict land leases to a maximum of 99 years, so that future generations can benefit.

Hong Kong should not just be a place for sovereign wealth funds, foreign firms, rich foreigners or locals to own property solely for investment. Ownership should be made possible for all, especially the young, to instil a sense of identity.

Universal suffrage is meaningless if voters don't own an inch of their own country.

Better to be a foreign landlord without voting rights than a tenant in your own homeland.

This article appeared in the South China Morning Post print edition as: Change way property is taxed to ease supply and prevent hoarding
Post