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Hong Kong stamp duty

Billionaire Henry Cheng warns new duty could rock normal property sales

PUBLISHED : Friday, 09 November, 2012, 12:00am
UPDATED : Friday, 09 November, 2012, 3:31am

Billionaire Henry Cheng Kar-shun has said the new stamp duty of 15 per cent imposed on non-permanent residents and people who use companies to buy property could affect normal transactions in the business sector.

The chairman of New World Development said the government should consider how the new policy could strike a balance between curbing speculation and normal transaction activity in the property market.

He did not elaborate on how he believed the business sector would be affected.

In a Legislative Council meeting last week, lawmakers challenged the decision to include local buyers who use companies to purchase flats in the stamp duty.

But tax officials said granting exemptions to such people would open loopholes and make enforcement difficult.

"We can still allow companies to buy properties," Cheng said. "But they must be owned by Hong Kong people. If they were owned by foreigners, they'd need to pay 15 per cent tax."

He said his company's plans on its property business had not been affected by the new policy and that prices should be stabilised by a balance between demand and supply.

On October 26, financial secretary John Tsang Chun-wah announced the 15 per cent buyer's stamp duty for non-local and corporate purchases. It is exempt for permanent residents.

Cheng, who is a member of the government's preparatory task force on the Commission on Poverty, also yesterday urged lawmakers to approve the controversial funding application for the HK$2,200 a month old age living allowance scheme.

He agreed that there should be a means test on applicants to prevent an unnecessary waste of resources.