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Hong Kong stamp duty

Lam made huge profit on property weeks before cooling tax

Franklin Lam denies knowing of new stamp duty when he put Mid-Levels flats on market

PUBLISHED : Tuesday, 30 October, 2012, 12:00am
UPDATED : Tuesday, 30 October, 2012, 2:51am

Property market analyst turned executive councillor Franklin Lam Fan-keung sold two Mid-Levels properties a few weeks before the government introduced measures to curb property prices last Friday.

And he made the declaration of one of the two properties only four days before changes were announced.

Lam stressed last night that he did not know of the new measures aimed at stabilising prices when he sold the properties. He said he had informed the government he planned to sell some of his properties when he joined the Executive Council in July.

Last Friday, the government imposed a new stamp duty of 15 per cent on properties bought by companies and non-residents.

In another move to curb speculation, the government raised by five percentage points stamp duties on resales of flats. Owners who sell flats within six months of purchase will now pay stamp duty of 20 per cent, up from 15 per cent; between seven months and 12 months, 15 per cent; and between 13 months and three years, 10 per cent. This latter rate extends the period that incurs stamp duty by one year. "This was no case of inside trading … I did not know of these measures when I sold the properties," Lam said.

He claimed to have sold flat B on the 14th floor of Casa Bella at 117 Caine Road at the end of September for about HK$9 million, making a profit of more than HK$5 million. Flat C was sold on the same floor for a similar price and profit on October 10. Both properties are about 800 sq ft. Lam declared the sale of flat B to Exco on October 4, and the sale of Flat C on October 20.

When he joined Exco in July, Lam said he informed the government he planned to sell 10 per cent of his 27-property portfolio. He has been donating his monthly salary as an Exco member to charity to show he intends to use his post only to serve Hong Kong, not to make money.

"I am fully committed to Exco and I don't have a job because of that. To make a living, I made it clear when I joined Exco that I planned to sell some properties," Lam said.

He added that he was not even in Hong Kong on the day the government announced the measures. The other exco members were only made aware of the changes a few hours before the government made the public announcement, he said.

Democratic Party lawmaker James To Kun-sun doubted if Lam really did not know the government was about to introduce measures to curb property prices before he sold the flats.

To said a number of sources had told him that top government officials have informal meetings with Exco members every Saturday.

"I can't rule out the possibility that [Lam] was told of the property measures during those meetings," To said.