Stamp duty relief for corporate property buyers set to be voted down

People Power does U-turn again on help for corporate property buyers

PUBLISHED : Tuesday, 15 July, 2014, 4:29am
UPDATED : Tuesday, 15 July, 2014, 7:52am

An amendment to stamp duty legislation to give refunds to corporate buyers who hold on to premises for three years looks set to be voted down today.

Radical group People Power changed its stance on the issue for a second time, and decided to object to the proposal from pan-democrat Kenneth Leung.

The amendment, to legislation to impose a doubling of stamp duty on most property purchases, will be put to a vote in the Legislative Council today, the last day before its summer recess.

"There are a lot of grey areas in Leung's amendment," said People Power legislator Raymond Chan Chi-chuen after a special internal meeting last night.

"For example, companies run by mainland merchants or corporates would also be exempted," he said.

The group's other legislator, Albert Chan Wai-yip, agreed, saying that he feared a further exemption would push up property prices.

The government's bill would affirm the doubling of stamp duty on purchases of all property valued at more than HK$2 million, which buyers have been paying since February last year.

People who sold their only home and signed a preliminary contract to buy a new one within six months could get a refund of the extra duty.

Leung's amendment to the bill was intended to extend the exemption to companies which used premises they own for their operations rather than for speculation, in order to help them save on business costs.

The two lawmakers from People Power will join 18 others from geographical constituencies who have indicated they will vote against Leung's amendment. A total of 13 say they will back the change. One lawmaker has not indicated his preference.

Another amendment seeking to exempt all buyers of commercial premises from paying the doubled tax - introduced as part of measures to cool the property market - was voted down 39-9.

The lawmaker who put forward the proposal, real estate and construction representative Abraham Razack, said the doubling of duty had significantly increased operating costs and discouraged foreign investment.

Professor Chan Ka-keung, Secretary for Financial Services and the Treasury, reiterated that the amendments would only make the cooling measures less effective.

Legco started scrutinising amendments after lawmakers passed the bill on its second reading yesterday. Only six members - Razack, independent lawmaker Paul Tse Wai-chun and four Liberal Party lawmakers - opposed it. The meeting then proceeded slowly as some pro-business members gave long speeches.