15 per cent stamp duty
To rein in the city's runaway housing prices, Hong Kong's Financial Secretary John Tsang Chun-wah announced an additional 15 per cent stamp duty on non-permanent-resident and corporate buyers starting from October 27, 2012. The move prompted speculation over the effectiveness of taxation on the real estate market and criticisms that Hong Kong was turning away from its roots as a free market economy in favour of a more protectionist market environment.
Cooling measures reining in residential market, says Tsang
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Price-cooling measures introduced in October are proving effective at reining in the overheated residential market, Financial Secretary John Tsang Chun-wah said on Monday.
“In November, the number of transactions fell, along with more restrained speculative activities, and residential prices were becoming stable,” he said in the Legislative Council’s financial services panel meeting, giving no figures.
By comparison, home prices overall rose 23 per cent over the first 10 months of the year, he said.
The government introduced two cooling measures in October 27.
One was a 15-per-cent buyer’s stamp duty charged on purchases by foreign residents and companies. The second measure extended the resale period, from two years to three, in which a special stamp duty on must be paid.
The measures have been effective in curbing market demand, Tsang said. “We will continue to monitor the situation closely and look for ways to maintain a steady and healthy market.”
Hong Kong’s economy faces a challenging a year, with uncertainties in the United States and Europe, Tsang noted. Developed countries were expected to take further fiscal measures to resolve their debt burdens and other structural economic problems.
“We will have to pay particular attention to whether the US can evade its fiscal cliff, and whether the euro debt crisis will deepen,” he said.
Centaline Property Agency announced last week that its secondary home price index eased by 0.55 per cent for the week of November 18, after hitting a record high of 116.81 points the previous week.
The agency’s Centa-City Leading Index, which tracks prices at 100 mass- and luxury housing estates in the city, recorded its first fall of the past eight weeks after the cooling measures were launched.
At the same meeting,Tsang also said he expected Hong Kong’s economic growth for this year would be 1.2 per cent.
In November, the government had forecast the city's gross domestic product (GDP) to grow this year anywhere between "one to two per cent".