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.
Stamp duty for developers to remain in place
The government will maintain its new buyer’s stamp duty on local corporate buyers of flats, the housing minister said on Tuesday.
Speaking to reporters after an Executive Council meeting where the issue was discussed, Secretary for Transport and Housing Anthony Cheung Bing-leung said the levy would not be lifted for local companies.
Developers have sought an exemption, for Hong Kong-registered companies, from the 15 per cent stamp duty that is now charged on flat purchases. It affects corporate buyers as well as non-permanent residents.
Cheung made the announcement while standing beside Chief Executive Leung Chun-ying.
Cheung said exempting local corporate buyers would create a substantial loophole in the measure.
However, Cheung said there would be some exemptions for companies that acquire old buildings for redevelopment.
The details will be included in a proposal tabled at the Legislative Council on January 9, he said.
The new duty was announced in October as part of measures to curb speculation, by mainland buyers, in the city’s property market.
Cheung will soon meet again with members of the Real Estate Developers Association to discuss their concerns about the new levy, he said.