Stamp duty expected to hit second-hand homes hardest

SHKP chairman says developers have already slashed prices on flats in new developments

PUBLISHED : Monday, 24 February, 2014, 4:45am
UPDATED : Monday, 24 February, 2014, 4:45am

The city's second-largest property developer, Sun Hung Kai Properties, believes higher stamp duties that became law at the weekend will hit the secondary residential market hardest, despite developers slashing their prices since late last year.

Prices for new housing were unlikely to fall significantly as construction costs continued to rise, SHKP co-chairman Thomas Kwok Ping-kwong said.

"Secondary home prices will drop 10 per cent this year as individual owners or foreclosed units being put on sale offer lower prices," he said yesterday.

Kwok spoke a day after the Stamp Duty (Amendment) Bill 2012 became law on Saturday following a four-day debate in the Legislative Council.

The bill imposes a buyer's stamp duty of 15 per cent on top of the existing duty on non-permanent residents and those buying through companies, as well as a special stamp duty of 10 to 20 per cent on quick resales. The levies have been in place since October 2012 to curb rising prices.

Kwok saw the additional stamp duties as short-term measures and expected the government to conduct a review when flat supply increased.

SHKP is among developers that have undertaken price-cutting strategies in recent months.

It sold more than 150 flats at Riva in Yuen Long after the project was relaunched last Tuesday at up to 18 per cent below current secondary transaction prices in the area. The latest prices were as much as 38 per cent lower than the previous launch, held in March last year.

Kwok also commented on the group's succession plan. "We have made arrangements for it, and the third generation of the Kwok family will come in at the right time," he said at a traditional poon choi feast, hosting 700 elderly people at Noah's Park in Ma Wan.

Kwok also said he was in favour of the government cutting relief measures like tax rebates, to free up money for Hong Kong's ageing population.

During his budget speech on Wednesday, Financial Secretary John Tsang Chun-wah is expected to cut rebates on salaries tax and waivers on property rates.