Parties split over amendments for Hong Kong property tax bill

Business lawmakers stick to guns on 'loopholes' but DAB says easing law would bring problems

PUBLISHED : Tuesday, 24 September, 2013, 12:00am
UPDATED : Monday, 03 October, 2016, 5:52pm

Political parties were divided yesterday over the amendments tabled by pro-business lawmakers on the government's property-cooling measures.

Andrew Leung Kwan-yuen, chairman of the Business and Professionals Alliance, and fellow alliance lawmaker Abraham Razack hope their amendments will plug the "loopholes" in the Stamp Duty (Amendment) Bill 2012, with the Democratic Party also indicating support.

But the Democratic Alliance for the Betterment and Progress of Hong Kong fears the amendments will create more problems and encourage speculation.

Under the bill, foreign and corporate buyers of property must pay an extra 15 per cent tax on top of the existing stamp duty, while a special stamp duty is levied on the resale of properties within three years of purchase, up from the original two years.

The bill is still being examined by a Legislative Council bills committee, which will discuss it again on Thursday next week.

The proposed measures, if enacted, will be retrospective to October 27. Since they were announced last October, the curbs have had a notable impact on transaction volumes and have drawn complaint from real estate agents, although prices have remained high.

Andrew Leung, representing the industrial sector, yesterday moved two amendments to introduce sunset clauses for the bill, saying the extra buyer's tax and special stamp duty should expire in October 2015.

"Officials have said they are special measures but never promised when they would expire," Leung said.

"Setting the expiry date in October 2015 is appropriate because by then supply should be back to normal."

Razack wants a tax refund for local corporate buyers after five years if their shareholders remain unchanged for three years.

He said he moved the amendment because fundamental rights were at stake.

"Why does a resident not need to pay the special stamp duty if he buys a flat under his own name, but has to pay if he sets up a company to buy the flat?" Razack asked.

"Purchasing flats under a company's name is quite common in Hong Kong and the government shouldn't presume those moves are speculation," he said.

Jeffrey Lam Kin-fung, fellow alliance lawmaker and an executive councillor, said the measures had put the market in an unhealthy state.

But Lam is bound by the Executive Council's rule of collective responsibility when the amendments are put to vote in Legco.