Property sector turns to radicals in tax fight
Agents seek support of lawmakers known for blocking tactics in bid to stop stamp duty bill
The real-estate sector is turning to radical politicians in their fight to block the government's anti-property speculation bill that seeks to cool the housing market through increases in stamp duty.
An alliance of major property agencies will this week meet four opposition legislators from People Power, the League of Social Democrats and NeoDemocrats - lawmakers known for previous bids to block or delay debates in the legislature.
One of the leaders of the alliance, Pierre Wong Tsz-wa, who is managing director and executive director of Midland Holdings, said: "We do not like property speculation either, but the government measures punish only the buyers. The legislators should not let a flawed bill pass."
At the centre of the controversy is the Stamp Duty (Amendment) Bill 2012, which seeks to create a new buyer's stamp duty - a special tax that applies only to corporate or overseas buyers and which would be set at 15 per cent of the property transaction price.
The bill is still being examined by a Legislative Council bills committee, which is to meet again today. The proposed measures, if enacted, will have retrospective effect from October 27 last year.
Since they were announced in October, cooling measures have had a notable impact on transaction volumes, although prices have remained high.
According to Wong, sales of homes in the city's 15 biggest housing estates were in the single digits the past six weekends, while transactions in the secondary market have fallen from an average of 10,000 a month to about 3,000.
Although a final vote on the bill is not expected until the end of November at the earliest, housing minister Professor Anthony Cheung Bing-leung has intensified efforts to secure lawmakers' support, as there have been signs that previously solid support from some major political parties could waver.
Cheung, who met lawmakers from the Democratic Party and Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) last week, is expected to meet Civic Party legislators this week to lobby for votes.
Two pro-business parties - the Liberal Party and Business and Professionals Alliance - have vowed to block the bill.
Business and Professionals Alliance lawmaker Abraham Razack, who represents the real-estate sector in the legislature, has plans to amend the bill so that local corporate buyers would be exempted from the stamp duty.
"Why does a Hong Kong resident not need to pay the special stamp duty if he purchases a flat under his own name, but has to pay a huge tax if he sets up a company to buy the flat? It is just because the government presumes anyone who uses a company to own flats is an evil speculator," Razack said.
His views were echoed by Liberal Party leader James Tien Pei-chun, who has plans to amend the bill to include a sunset clause.
The Democratic Party has asked the government to consider exempting charitable organisations from the stamp duty.
Chief Executive Leung Chun-ying has so far stood firm against easing the cooling measures.