Property stamp duty concessions fail to impress lawmakers

Lawmakers from all parties say proposed concessions are inconsistent

PUBLISHED : Tuesday, 13 May, 2014, 11:37pm
UPDATED : Wednesday, 14 May, 2014, 8:26am

Lawmakers were unimpressed by a government bid to appease them with concessions on a bill to affirm last year's doubling of stamp duty, introduced to cool the property market.

The concessions, leaked on Monday, were put before a meeting of a Legislative Council bills committee by Secretary for Financial Services and the Treasury Professor Chan Ka-keung.

Exempting from duty the purchase of a parking space by permanent residents who do not already own a flat and a parking place was widely criticised.

If a person bought more than one parking space at the same time, none of the spaces would qualify for the waiver. Critics said this was inconsistent with the bill's treatment of those who buy more than one flat at a time.

"You are saying that one cannot get a waiver if one buys multiple parking spaces. But if someone buys many flats under a single contract, then a waiver will be granted [for all the flats]," lawmaker Paul Tse Wai-chun said. "You are contradicting yourself. If the measure is aimed at curbing speculation, why don't you grant a waiver on only one residential property in each transaction?"

Chan argued this would be "very complicated".

Another change - making it easier for residents buying a new home to replace an old one to obtain a refund of the punitive duty, levied since February last year - was better received but still came in for criticism.

The bill originally said permanent residents who are first-time buyers or who sell their only home and sign a provisional sale and purchase agreement for a replacement flat within six months would qualify for a refund. The new proposal extends the waiver to the date the purchase of the replacement flat is completed. This effectively extends the qualification period for a refund for buyers of completed flats - new or secondhand - by one to two months. But it extends the waiver for buyers of uncompleted flats to as long as three years.

"Isn't it unfair to buyers of old flats?" asked Democrat James To Kun-sun, who proposed that all such buyers be allowed a waiver if they sign a provisional purchase agreement within 12 months of selling their old flat. "We consider it a unified, simple and clear way to set a period," Chan replied.

Lawmakers representing business, including Abraham Razack, Andrew Leung Kwan-yuen and Lam Tai-fai, want the exemptions extended to purchases of commercial properties. But Chan said: "The objective of our policy is to take care of first-time homebuyers who are permanent residents."

He said he would consider lawmakers' suggestions.

The industry's reactions to the waiver change was mixed. "It is a sensible measure," Swire Properties chief executive Martin Cubbon said. "It alleviates the burden on those wanting to upgrade their homes. It will be welcomed by the market." Sun Hung Kai Properties' co-chairman Thomas Kwok Ping-kwong said it would not boost sales.

Buggle Lau Ka-fai, chief analyst of Midland Realty, said it would encourage developers to speed up the sale of new projects.