Hong Kong stamp duty

Tsim Sha Tsui sales office for The Reach is quiet after a hectic day

PUBLISHED : Sunday, 28 October, 2012, 12:00am
UPDATED : Tuesday, 30 October, 2012, 10:00am

At the Tsim Sha Tsui sales office of The Reach estate in Yuen Long, only a handful of prospective buyers milled around, in sharp contrast to Friday night when mainlanders and locals dashed in to scramble for new homes before a new tax on non-local homebuyers took effect.

One woman from Guangxi rued her missed opportunity as she only learned of the new measures on the spot.

She said the move was unfair to people who really needed to buy a flat in the city. "Now we will have to pay more and it will be harder on us," she said.

One man said he would wait and see what happened next, and would think twice before buying. "Since the stamp duty is so high now, it will definitely affect any [short-term] resale as a property investment," he said.

A real estate agent said the effect of the new measures was immediate. Buyers at The Reach were few and far between compared with the night before.

"Only half of the [expected] local prospective buyers came today," said Louis Chan Wing-kit, Centaline Property Agency's Asia-Pacific chief executive for home sales. "Any prospective mainland buyers who had wanted to buy would have made their choice before midnight."

Another real estate agent, Buggle Lau Ka-fai of Midland Realty, said the secondary market would take a strong hit from the special stamp duty on resales. He predicted the sector to see 10 per cent less in transaction volumes.

Secretary for Financial Services and the Treasury Professor Chan Ka-keung disagreed that the measure would cut second-hand property supply and jack up prices. "I understand some agents couldn't find flats [for resale], but it is not due to the special stamp duty," Chan said.

"When there are fewer speculators, there will be fewer second-hand flats, but this is exactly what we are trying to do … it will make the second-hand market genuinely driven by users."