Hong Kong 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.
Extra stamp duty 'to hit speculators only', says financial secretary Tsang
Real buyers will not be hurt, John Tsang says; developers respond by lifting agent commissions
Genuine home buyers will not be affected by property cooling measures, Financial Secretary John Tsang Chun-wah said yesterday, adding that the higher stamp duties imposed on Friday would not apply to about 50 per cent of local buyers.
His comments came as a government adviser on housing policy suggested even tougher measures to curb prices may be introduced if necessary.
The government's announcement included a doubling of stamp duties on home and non-residential properties valued at more than HK$2 million. Stamp duty on properties costing less than HK$2 million rose from a flat rate of HK$100 to 1.5 per cent of the transaction price. But the new rates do not apply to first-time buyers, people who do not own other homes, and those selling their only flat and buying a new one within six months.
Tsang said on his online blog: "To cater for the real housing needs of people, people who decide to own only one residential unit [at a time] will not have to pay the doubled stamp duty."
This group amounted to half of all local home purchasers, he said, and much of the demand from the rest would come from speculators.
Stanley Wong Yuen-fai, a member of the Long Term Housing Strategy Steering Committee, believed more measures were possible to change perceptions that prices would keep surging. He said that if the market showed no signs of cooling, the government should consider banning mortgages for those who already owned a flat and further lift stamp duty rates.
Eleven flats at 15 major housing estates were sold in the secondhand market over the weekend, according to data monitored by property agent Midland Realty, down from 13 transactions the previous weekend.
The cooling measures prompted developers to embark on aggressive selling strategies.
It is understood that Chinese Estates raised the commission for agents selling shops at its commercial project, Causeway Place, in Causeway Bay. The developer, who was giving agents a commission of 4 per cent of the sale price for selling second-floor shops in the mall last Friday, raised it to 6 per cent. The commission on first-floor shops was 5 per cent, agents said.
Chinese Estates had planned to start selling first and second-floor shops early next month. It changed tactics after the cooling measures were announced.
Victor Lui Ting, deputy managing director of Sun Hung Kai Properties, said the company would speed up the launch of the third phase of The Wings, a residential project in Tseung Kwan O, and expected to start taking orders by the end of the year.
He stressed the developer was little affected by the latest curbs.
Meanwhile, 20 flats at Residence 88 in Yuen Long were sold over the weekend after developer Sun Hung Kai raised agents' commissions, sources said.
William Wong, an account manager with Hong Kong Property, said vendors may raise their asking prices to compensate for the higher stamp duty.