Top advisers approve proposals for vacancy tax and more affordable flats to help ease Hong Kong’s housing crisis
Proposed vacancy tax to be twice the estimated annual rental value of a flat
Hong Kong’s flat-hoarding developers are set to face an annual vacancy tax amounting to double a property’s annual rental income, after the city’s top advisory body on Thursday endorsed a basket of new measures aimed at easing the housing crisis.
With developers worried about the vacancy tax, the property index on the city’s Hang Seng benchmark fell as much as 1.3 per cent in an otherwise rising market, before recovering slightly to close Thursday 0.4 per cent lower than the day before.
Under intense pressure to provide short-term relief while seeking longer-term solutions, the government has invited public feedback on 18 proposals to plug a projected shortage of 1,200 hectares of land for housing and economic development in the next three decades. But even the quickest proposals may only yield results in about a decade.
A source familiar with the issue said the proposed vacancy tax would be twice the rateable value of a home. The rateable value is the estimated annual rental value of a flat, calculated by government specialists and based on market rates.
All new flats that have been left unsold for at least a year will be subject to the tax, according to the source.