• Fri
  • Sep 19, 2014
  • Updated: 6:31am
NewsHong Kong
PROPERTY

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.

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quinlan
Where is the tax on UNOCCUPIED residential premises?
HK-Explorer
The current measures have reduced transactions and also caused prices to drop around 10%. The government has achieved what it needed to achieve. They must ensure that once interest rates increase and new supply comes on the market that they reduce the measures put in place in order to stop a collapse of the market be over regulation.
impala
Indeed. And where is the simplest, most logical measure if you want to restrict property price rice: a capital gains tax?
chuchu59
I really detest the lawmakers representing the business sector. They want exemptions for commercial properties as if those involved hadnt profited enough already. Another prime example of why we should get rid of the functional constituencies.
whoaman
Why these jokers are snivelling about stamp duties and parking spaces is beyond funny. Even small flats are ridiculously expensive STILL!!
HK-Explorer
Apartments are not necessarily expensive. Private per square foot is expensive is high but not necessarily a place to live.
You could argue that Hong Kong has some of the cheapest residences in the world. 50% of people in HK live in government housing which costs ~HK$1,000 per month.
I would bet if you removed the 50% of houses in any country and compared the top 50% most expensive with HK private housing that there would be little difference and HK would not fall in the top 20.
It is middle class that feel the high prices.
HK-Explorer
Permanent Residents wanting to upgrade should have 2 years to sell their old flat. One problem right now is the market has stagnated as people in small homes are not upgrading to bigger ones or new houses. This removes secondhand small homes from the market which are cheaper and suitable to first hand home buyers. They are too worried they cannot sell within 6 months and would be penalised.
You also need to remember mainlanders will never sell their HK homes under the current policy as they cannot re-buy if they do. All those years of mainlanders buying 30% of new housing are pretty much now counted out of the second hand market. Ie if they sold they would have no way to use the money. It is not like they can take it back to china
allan94
chan kk is an idiot. he was dean of hkust. dont study there. if this idiot can be dean, what can u say about the Uni?
impala
Yes, but he is a dangerous idiot - filled to the brim with classic Chicago school ideas about free markets, the intrinsic goodness of big businesses, people as rational actors, minimalist government interference, and so on, and so forth. Most of these ideas have since been demonstrated to severely questionable or plain wrong, both in theory and in practice.

But he wouldn't know. The "professor" hasn't published so much as a book review, let alone an academic work for nearly 15 years.

And so, the Chicago ideology lives on in the minds of policy makers like this particular member of John Tsang's team of incompetent shoe-shiners and while the rich may get richer thanks to people like this man, the standard of living for the other 99% continues to decline.

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