Legislators approved last year's decision to impose special stamp duty on quick resales of flats, but said it would not bring down the sky-high property prices. The only way to do that was to resume building subsidised flats for sale under the Home Ownership Scheme, they said.
The bill they approved rubber-stamps the extra duties imposed in November. An additional 15 per cent will be levied on homes sold within six months of purchase; 10 per cent extra will be payable on those resold within a year and 5 per cent on those resold within two years.
The government will review the policy every two years.
Government figures show confirmor sales - in which a buyer sells on a property before completing the purchase - fell from 320 a month before the announcement of the levy to 72 in April, but many lawmakers expressed scepticism that the new levy will be effective in keeping property prices in check.
Civic Party lawmaker Ronny Tong Ka-wah said although the number of quick resales had dropped since the government announced the measures in November, property prices showed no sign of falling.
'The levy cannot tackle the root of the problem,' he said. 'There must be more ready-built homes, such as flats under the Home Ownership Scheme and public estates, if the property prices are to go down.'
The scheme was halted in 2002 as part of efforts to rejuvenate the then-battered property market. But property prices recently passed their previous peak, set in 1997.
Legislator Wong Kwok-hing, of the Federation of Trade Unions, said the levy could not deal with the deeper cause of high property prices.
'It can only deter investors from reselling their homes quickly. Increasing the supply of flats is the only way to lower property prices.'
Housing secretary Eva Cheng said the main objective of the levy was not to lower property prices, but to deter a quick resale.
'The government has a spate of measures to regulate property prices and quick resales, and the levy is only one of them,' she said.
She said building more public rental flats and subsidised flats for resale would not be an effective means of regulating property prices.
An amendment by Abraham Razack, legislator for the real estate sector, to set an expiry date for the new law was rejected.