Stamp duty keeping non-locals out of property market
It's too early to conclude that cooling effect was short-lived, say analysts, as property prices in the secondary market hit a new record
The new 15 per cent tax on non-local and corporate property buyers has put many of them off the housing market, but sales volumes and prices have rebounded in the two months since it took effect, the latest figures show.
While observers believe it is too early to say for sure if the cooling effect was short-lived, they argue that locals buying through firms should be exempted from the tax, as figures show few speculators use companies to evade tax.
On October 27, the government imposed a new stamp duty of 15 per cent on non-locals and companies buying homes. It also raised by 5 percentage points an across-the-board "special stamp duty" on sellers to curb speculation, and extended its effect on resales from two to three years. Duty of 10 to 20 per cent of the price is payable if a property is resold in that period.
Between then and the end of January, 620 residential transactions were recorded as chargeable. Of these, 166 involved people not holding Hong Kong permanent residency - well below the 2011 monthly average of 458.
A further 454 involved company buyers. The market share of such buyers shrank from 12 per cent of all residential property transactions in November to 3 per cent last month. Despite this, sales rebounded last month to 7,136, from 3,951 in December.
The sales figures were given to lawmakers by the Transport and Housing Bureau, as a Legislative Council committee continued to vet the bill on the tax, which will take effect retroactively if passed.