New 15 per cent stamp duty may hit expatriate homebuyers
Stamp duty aimed at speculators could deter not-yet-permanent residents from buying
Johnny Tam and Tony Cheung
It may be targeted at property speculators, but a new stamp duty would derail the home-purchase plans of expatriates who are not yet permanent residents.
That was the debate raging online a day after new cooling measures on the property market were announced.
A mainlander who works in Hong Kong, but is not a permanent resident said the move was unfair to expatriates, who also contributed to society.
"The initiative to cool the property market is good, but there has not been enough consideration," posted the member of Sina Weibo, the most popular microblogging service on the mainland. "Non-permanent residents, like permanent residents in Hong Kong, pay taxes and contribute to the economy, but their needs to buy a property are neglected."
Expatriates living across the border saw the tax more as a way to ease anti-mainland sentiment among Hongkongers than as an effective tool to cool the market.
"This is just an act of the politicians trying to ease the rising xenophobic sentiment in the city," went one posting.
Political analyst James Sung Lap-kung believes that while the objectives of the move were primarily financial, it may also ease Hongkongers' ambivalence towards mainlanders and boost Chief Executive Leung Chun-ying's popularity. "The government [already] implemented its 'Hong Kong property for Hong Kong residents' pledge, so - together with the new initiatives, which target non-local buyers - Hongkongers may feel the government is taking their interests into consideration," Sung said.
The government has restricted sales of flats in some developments - including resales within 30 years - to Hong Kong permanent residents.
Development minister Paul Chan Mo-po said the government would continue imposing such restrictions on flats in some despite the announcement of the cooling measures.
Sung believed criticism from prospective mainland buyers of the local administration would not last long. "The backlash will be very limited, because buyers on the mainland would know that Singapore and other places impose restrictions on foreign property buyers too."
In Singapore, non-resident and corporate buyers pay 10 per cent of a home's value in Additional Buyer's Stamp Duty - 5 percentage points less than such buyers must pay in Hong Kong.