Owners of empty flats could be taxed under new plan to tackle Hong Kong’s housing shortage
Finance chief Paul Chan did not specify if the tax would be on homeowners or developers, but analysts are sceptical if the plan will even come to pass, citing the challenges of imposing it on either group
Policymakers are studying the possibility of imposing a vacancy tax on property owners hoarding empty flats as the latest measure to tackle space-starved Hong Kong’s acute housing shortage.
Financial Secretary Paul Chan Mo-po revealed on Thursday that the option, which would mark a radical and highly controversial policy U-turn, was on the table, saying the government was concerned about the sharp increase in the number of unsold flats last year.
Hong Kong’s biggest housing sale starts with a roar as 750 units snapped up during weekend sales at Wheelock’s Lohas Park
However, while some lawmakers supported the idea, housing experts remained sceptical as to whether the government would go ahead with it, pointing out that the city’s powerful property developers would be vehemently opposed to any such tax, and it would be next to impossible to force it upon private flat owners.
Hong Kong’s residential property prices continue to surge to record highs despite the government’s efforts to cool the overheated market by ramping up land supply and increasing stamp duties.
The latest statistics from the Rating and Valuation Department last month showed the home price index rising 1.27 per cent to 357.5 in January, hitting a record for 15 consecutive months – the longest stretch of gains since 1993.
Hong Kong’s February rents break 22-month surge after holiday lull. Is relief temporary?
During the previous administration’s term from 2012 to 2017, officials repeatedly questioned the effectiveness of new measures such as rent control, or tax levied on vacant homes.