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.
Solicitors, commerce chamber seeks exemptions to proposed stamp duty
Solicitors and a foreign business chamber have expressed concern about a planned 15 per cent stamp duty on non-local and corporate property buyers, while another chamber has endorsed it.
The Law Society and the Australian Chamber of Commerce in Hong Kong both called for exemption for companies controlled by permanent residents, who, as individual buyers, are exempted from the tax.
The French Chamber of Commerce and Industry said it endorsed the tax proposals.
In submissions to a Legislative Council committee vetting the bill, the Australian chamber's chief executive, Kirsty Boazman, said: "The chamber is concerned about the impact of the buyer's stamp duty on people who hold a valid Hong Kong working permit who, while they intend to make Hong Kong their permanent home, have yet to qualify as permanent residents."
Boazman said the imposition of the tax on a permanent resident who used a company to buy a property was "unduly harsh", calling for an exemption for companies wholly owned by permanent residents.
While the Bar Association said it had no comment on the bill, the Law Society, as developers and businesses have done, called for exemptions for companies controlled by permanent residents.
It said exemptions should be extended to a permanent resident who bought a flat through a trustee who was not a permanent resident, because the actual owner should not be charged the tax.
The bill, if passed, would take effect retroactively, dating to October.
Meanwhile, the government said it had charged the "special stamp duty" on 187 transactions in January, up from 150 recorded in the previous month, collecting HK$37.7 million.
The duty, introduced in 2011 and tightened last year, is payable by all flat sellers who sell their homes within three years of the purchase.