New property tax introduced for non-local buyers

The government took aim at the city’s overheated property market with another round of cooling measures on Friday, including a new levy on foreign buyers.

Financial Secretary John Tsang Chun-wah said the new levy – 15 per cent of the transaction price – will apply to non-residents and all companies, including local and overseas ones, that buy flats in the city.

A second measure extends the current special stamp duty on property resales. People who sell a property within three years of buying it will be taxed up to 20 per cent. The existing levy covers resales within two years of purchase and a tax of up to 15 per cent.

Both measures will come into effect on Saturday.

Tsang said the new measures would curb demand in the market and supplement other cool-down measures and plans to increase the supply of new flats.

The property market had become “severely out of reach” for many Hongkongers while the economy remained stagnant, with slowing retail sales and exports but rising inflation, he noted.