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.
Property-cooling measures here to stay: CY Leung
Tough policies to stabilise overheated property market remain a necessity
The government would neither relax nor withdraw its property-cooling measures as hot cash remained abundant in the global market, Chief Executive Leung Chun-ying warned on his blog yesterday.
His comment came a day after Financial Secretary John Tsang Chun-wah appealed on his blog to lawmakers to pass the bills for the property taxes that were introduced over the past few months.
"Some people in society and lawmakers want the government to lessen the measures, but we must be aware that it has not been easy to steady the market in the past year," Leung wrote.
The Legislative Council, now in its summer recess, has yet to pass the two bills for three new property taxes: the 15 per cent "buyer's stamp duty" to be levied on foreign and corporate buyers of residential flats; the "special stamp duty" against the resale of flats within 36 months, adjusted from 24 months; and the "double stamp duty" on all buyers of residential and non-residential properties, except Hong Kong permanent residents who don't already own a flat.
The taxes have already taken effect, with the bills to become retroactive if passed.
Lawmakers from the business sector have objected to the measures, and they plan to mobilise more opposition to the bills after the recess.
Referring to the phenomenon on the mainland where, despite government cooling measures, new flats are all snapped up the day they are put on the market, Leung said home prices in Guangzhou had risen more than 20 per cent in the past six months.
The market in London was just as overheated because of keen demand from foreign buyers, he said.
"Before we introduced the measures, Hong Kong people were speculating on car-parking spaces and shops. Home prices were soaring week after week," the chief executive wrote.
"Have people forgotten those days? The tough measures may offend some people, but they have to be done."