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  • Dec 27, 2014
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NewsHong Kong

Sparks fly in developers' meeting with officials over anti-speculation taxes

Private developers, angry over government's stamp duty to curb speculation, slam officials for being 'ignorant' about the sector

PUBLISHED : Saturday, 22 December, 2012, 12:00am
UPDATED : Saturday, 22 December, 2012, 3:51am

Private developers are threatening to stop redevelopment projects, claiming the government's new anti-property speculation taxes will render property acquisition unprofitable.

In strongly worded comments after a highly charged meeting with Transport and Housing Bureau officials yesterday in a bid to force the government to ease the measures, the developers expressed "extreme regret" over the new taxes and criticised the officials for being "ignorant" about how the property sector works.

"The officials did not seem to know about redevelopment," said Stewart Leung, chairman of the Real Estate Developers Association, after the meeting.

"I simply told them they were too ignorant," he said.

The association wants the new buyer's stamp duty - introduced in late October, under which overseas or corporate buyers of local properties have to pay 15 per cent of the transaction price as tax - to be dropped, or for local firms to be exempted.

They claim the tax jacks up costs for acquisition of properties for redevelopment.

But the government stood firm on the issue, saying that any exemption could create loopholes for non-locals to speculate on property through local companies.

Deputy Secretary for Transport and Housing Agnes Wong Tin-yu said the government explained details of future implementation of the buyers' stamp duty during the meeting.

She said the tax would be refunded to developers who can produce the government's consent of redevelopment within six years of completing the acquisition, adding that the government would adjust the stamp duty rates based on prevailing market conditions when necessary.

But Leung argued: "We told them it won't work and the government will have to do [redevelopment] itself. No developer would be interested in doing redevelopment any more ... [It] takes a long time and involves many companies and lengthy discussion with owners."

An association member, who declined to be named, said of the tense atmosphere at the meeting: "We were angry and kept questioning the officials what loopholes they were concerned about. I don't think we will have another meeting with the government."

Leung quoted officials as saying that they were willing to listen and asking the association to submit more views. He said the association planned to submit another paper to the government after the holidays.

Developers have been up in arms over the government's extension of anti-property speculation taxes since they were announced in late October.

In a statement last night, the Transport and Housing Bureau reiterated that the new tax was in line with the policy to place higher priority in meeting local people's housing needs.


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This article is now closed to comments

why do you spammers keep posting the 250k figure?
Because it is based on public available official data.
go read and learn
It's not just corrupt Mainland money buying up property for a rainy day. Gold purchased by Taiwan triads, no doubt Mexican and Colombian drug cartels. greedy lawyers who knowingly invest corrupt funds on behalf of their clients without reporting the funds as required. Then of course InvestHK tells us how much money is being invested here, but does not mention how soon the money departs or what it is used for here. Hong Kong is truly the world's (money) laundry and a blind eye is turned. What should be happening is a compound massive rateable value charge on empty apartments, forcing the owners to pay large sums or rent out the properties. Before any overseas party is allowed to buy property the source of the funds should be vetted. Local lawyers should have to produce data showing the validity of funds used. Premises that remain empty under the new rateable value system will soon show up as corrupt investment properties. Meanwhile the landlord tenant Ordinance should be reinstated to its former glory with access to the Lands Tribunal - it was shut down after SARS; SARS is long gone but domestic tenants remain unprotected from greedy grabbing non negotiable landlords. The cost of local property for genuine user-buyers is so high that everyone must rent, thus driving up the rental costs by way of increased demand. The balloon is about to pop. Sooner better.
That is the figure published regularly in the press.
Brainless officials? What's new? It's just too mentally taxing for them to work out a way of achieving the objects of the tax while preserving a realistic prospect for developers to redevelop.



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