Cooling measures to stay despite property agents’ complaints

Chief Executive Leung Chun-ying said on Wednesday he had no plans to withdraw or relax measures introduced early this year aimed at cooling down Hong Kong's property market.

There have been recent calls by property agents for the scrapping of the cooling measures, which they say have hit their businesses but have had little effect on curbing prices.

Leung, who gave a speech at a luncheon on long-term housing organised by the Coalition of Professional Services in Wan Chai on Wednesday, also said that these measures needed to be maintained because Hong Kong’s property prices had continued to increase despite the introduction of the measures.

An average monthly increase of 0.4 per cent was recorded for flat prices between March and July, he said, adding that the measures had stabilised a "quite exuberant” market.

Leung said it would not be good to exempt certain parties – such as charity organisations and companies owned by Hong Kong permanent residents – from the stamp duties.

“Any form of exemptions or tax rebates could weaken our power to cool the market,” the chief executive said. “[Exemptions] would also weaken our ability to prevent the property bubble expanding, which could affect the stability of the city's financial system and macro-economy.”

He added that the sales rules in the measures were in line with the government’s greater policy of prioritising Hongkongers’ demands when allocating resources during shortages.

“Housing is a major issue in our society. Other social and political issues cannot be resolved without solving the housing problem,” he said.

The three cooling measures introduced by the government are a 15 per cent “buyer’s stamp duty” levied on foreign and corporate buyers of residential flats; a “special stamp duty” against the resale of flats within 36 months, adjusted from 24 months; and a doubling of the stamp duty on all buyers of residential and non-residential properties, except Hong Kong permanent residents who don’t already own a flat.

The measures were introduced in February, although lawmakers have yet to pass the bills for them. The bills will become retroactive if passed. The taxes have already taken effect.