• Thu
  • Oct 2, 2014
  • Updated: 4:29am

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.

 

NewsHong Kong
AUTONOMY

CY Leung 'notified' Beijing before unveiling stamp duty

PUBLISHED : Tuesday, 26 March, 2013, 2:52pm
UPDATED : Wednesday, 27 March, 2013, 7:22am
 

Poll

  • Yes: 79%
  • No: 21%
27 Mar 2013
  • Yes
  • No
Total number of votes recorded: 676

Chief Executive Leung Chun-ying confessed yesterday to phoning Beijing about a new stamp duty to be levied on non-local homebuyers in Hong Kong ahead of announcing the tax.

He said he was "notifying" Wang Guangya , director of the Hong Kong and Macau Affairs Office under the State Council, for the sake of "internal and external diplomacy" and denied he was seeking approval.

His admission came two days after Wang was cited by lawmakers as saying Leung had called to inform him of the new 15 per cent duty a day before it was unveiled in October.

It raised concerns that Leung could have breached the Executive Council's confidentiality rule and the principle of Hong Kong people governing Hong Kong, and that the information could have been leaked to investors.

"It was not a request for instructions … since the buyer's stamp duty is levied on non-local buyers, it is necessary to deal with internal diplomacy and external diplomacy," Leung said when asked about the telephone call he made on the night of October 25.

"Hence, after we decided to impose the buyer's stamp duty - after the decision was made - we notified the relevant party. This was because we need to deal with internal diplomacy and external diplomacy."

After we decided to impose the buyer's stamp duty ... we notified the relevant party. This was because we need to deal with internal diplomacy and external diplomacy

Financial Secretary John Tsang Chun-wah announced the 15 per cent stamp duty on non-locals and companies on the evening of October 26. It came into effect the next day.

A spokesman for the US consulate for Hong Kong and Macau said it had not been informed in advance of the introduction of the duty. He said representatives of the US and other foreign consulates attended an information session about the duty at the Transport and Housing Bureau on the day it was announced.

A source familiar with the government's operations said it was unusual for the administration to inform mainland departments about sensitive policies before they were announced.

"Even if senior Hong Kong officials want to seek the views of their mainland counterparts, they should consult mainland officials on whether there is any problem with options they are deliberating before a final decision is made, rather than asking mainland officials to clear any doubts before an announcement is made," the source said.

An executive councillor who asked not to be identified said the call should be seen as routine and nothing exceptional, saying the "notification" would not undermine the city's autonomy. The Chief Executive's Office said it had nothing to add when asked if Leung's move might infringe Exco's confidentiality rule.

Share

More on this story

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

12

This article is now closed to comments

ejmciii
It would be more odd if he did not do so. HK is part of China with certain rights and freedoms others do not have but it hardly seems to be inappropriate that he would coordinate with his superior on a significant economic matter as their economy is affected by (and affects) ours.
hard times !
notified Beijing officials before unveiling the raise of stamp duty imposed on luxurious flats purchased by non-Hong Kong residents is itself an improper act since it breaches , 'One Country, two systems' and 'Hong Kong is governed by Hong Kong people'. The stamp duty raise is definitely an internal affair just like the limit of two-can milk powder formula each trip each day across the border to curb the so-called parellel traders from getting rid of local mothers' milk powder. Should we need to inform Beijing before the ordinance is enacted ? of course not ! About 10% of the luxurious flats were purchased by Mainland buyers doesn't justify the noticfication at all.How about the other overseas buyers and corporate buyers ? Should they be informed as well ? I wonder.
chungkent
This is Leung Chun-ying's working style, that is, never takes up any final responsibilities.
rvto
As CY is not the President of China, seems to me normal that he informed the next in line about a coming important rule. If due to this information a rush is started, the leak have to be found.
If there is a leak, question is if this can handled by the ICAC.
Dai Muff
So when did he call the consulates of other nationals who might want to buy property in Hong Kong? I missed that news.
superdx
So after notifying government officials in China, there was a mad rush to buy flats in Hong Kong. Where do you think all the money laundering comes from?!
Good job, keeping speculation alive and well!
walkup
CY now has a history of putting his foot in it. The only thing missing is the tugging of forelock, though we can always look forward to the denial.
blue
Stop with the hacker complaints already. This has nothing to do with the above article.

Also it's rich that someone who loves Long Hair so much then calls the Chinese nationalists here as being leftists. Hello Kettle, my name is Pot.
 
 
 
 
 

Login

SCMP.com Account

or