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  • Dec 21, 2014
  • Updated: 11:26am
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PROPERTY

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

PUBLISHED : Monday, 25 February, 2013, 12:00am
UPDATED : Monday, 25 February, 2013, 5:27am
 

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.

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babyhenry
Idiotic at best.... consider the shoe box size home in HK, why is owning 2 or even three homes such shock? So you want me to have more kids, yet my flat is ridiculous expensive and small already now you want me to cramp my parents inside too? Or in some cases even sibling families?
You know the property prices are so high because the gov't have such a high stake at it. I will rather pay 25% -30% tax than to have the gov't continue with their high land price policy which makes it possible for the so called low taxes in HK which is a mirage. Fact is Gov't land sales is a pretax on everyone, just that the developers and banks collect it after the gov't collect their share through land sales. Drop the highland price policy so medium and smaller developers can join in again, the prices is so high right now only big developers can join in the bidding, with such a strong position and lack of competitors no wonder those ridiculous small new flats command such idiotic prices.
hkiedlib
John Tsang is totally out of touch if he believes genuine home buyers will not be affected by property cooling measures. Of course they will! For example, what about those people who buy a second property for their elderly parents and/or children to live in? What about those retired people who already own a second small investment property as a means of getting some extra income but want to change their principal residence? It seems that John Tsang's definition of a speculator is somebody who owns more than one property. This is very narrow and unfair to those genuine home buyers who happen own more than one property. It would be fairer if the government asked those buyers who have more than one property to declare their principal residence and treat these properties in the same way as buyers who only have one property.
HK-Explorer
John Tsang did the only thing he could do. He pushed out the first 4 of his Ten Commandments. Once he reaches 10 then no one will be able to buy a flat. This is what happens when politicians listen to and act on everything they hear. You cannot say John is not for the people
A) The People said speculators were pushing up prices. John said thou cannot sell a flat within 2 years.
B) People said mainlanders and foreigners were pushing up prices. So john said he will not allow foreigners to buy houses.
C) the people said it is people owning multiple houses. John said you cannot own more than 1 house.
D) people said that poor people are borrowing too much. John said not to loan poor people money.
HK-Explorer
I am sure this will be banned next week.
dmw
"Genuine" homebuyers - whatever that term means: what about "genuine" office buyers, who now have to pay 8.5% to get security of tenure by owning rather than renting? This man is economically illiterate. Reducing transactions by increasing transaction costs has no effect on intrinsic value, supply or demand for premises. It just means that those who want space will have to rent, and those who own space will have to lease it out rather than suffer the duty. It also means that more people will transfer the shares of offshore corporate owners instead, avoiding duty altogether.
laurafromlamma
it was about time, but the stamp duty increase should include flats under 2 million, otherwise we will see a distortion in that segment of the market when speculators start switching to village homes in the new territories. I own a small flat and if i wanted to buy a bigger one, i would just sell my current flat and buy a new one. I know people who accumulated 5 or 6 flats just by mortgaging their older flats. That's speculation. It's pernicious when it makes the market so hot that lower middle-class buyers cannot afford to buy anything while some people live off the rent of their multiple flats or keep buying and selling them the way they buy and sell stocks. The property market shouldn't be regarded as a casino. If they want to own more than one flat, fine, they just pay the increased stamp duty. As to buying flats for relatives, i don't see a problem. Just put the flat in their name!
donniemcm
@hkiedlib
There is always a solution : asset transfer between direct family (father and son) which is exempt from duty.
Anyway there will still be "left over" people, sad to say this but the number of beneficiary is far higher than those you will be unfairly treated.
22gt7
"The new rates do not apply to those selling their only flat and buying a new one within six months." Does this mean that those selling their only flat and buying a new one AFTER six months will be required to pay the new stamp duty? Are they not exempt from the new rates because they no longer own any home after selling their only flat? Shouldn't Financial Secretary clarify this point?
donniemcm
Well it's a good point.
But I think that a limit is good as you don't want people to undefinedly "try to sell his previous property.
Also the "good" part of the 6 months is supposed to give a push to home switchers and revise their selling price expectation to lower level.
laurafromlamma
babyhenry, yes most 350 sqf flats in village houses are below 2 mil. Mine was just below 1 mil when i bought it 3 years ago.
hkiedlib
@donniemcm
I agree with your comments below as far as they stand. However, what about existing property owners who have already bought property for their parents and/or children before this increase in stamp duty came into effect? If tomorrow they wanted to change the residence they live in they would have pay double stamp duty since they own more than one property. Is this fair? I think not! I believe a fairer approach would be to introduce the principal residence concept.
Best!
Easy to handle :
- If people want to help parents or children, then just put the ownership into their name as they are supposed to have no property if they need help.
- Honestly that elder people at his/her age will be picky to switch flat?
Thanks
johndoe
Your point is, John is bad?
HK-Explorer
It would somewhat defeat the purpose if could buy property for a relative but keep it under your name. Everyone would just say it is for their kids or parents.
babyhenry
With all due respect, are there still HKD 2 Mil below flats?
With the insterst rates so low, its just a matter of time we will have a hard time finding HKD 2 Mil & below carparks.
donniemcm
@hkiedlib
Easy to handle :
- If people want to help parents or children, then just put the ownership into their name as they are supposed to have no property if they need help.
- Honestly that elder people at his/her age will be picky to switch flat?
Thanks
mcheung
Well done John Tsang!!! It's about time the government roll out this to stamp out speculators.
johndoe
So they can just ask the sellers to lower the price. What's your problem really.

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