New stamp duties rolled out over the last few months to try and cool the property market have been a big blow for expatriates in Hong Kong - and a matter of some confusion.
On Monday last week the Inland Revenue Department, which handles all queries on stamp duties, was so overwhelmed with calls that its inquiry hotline was disconnected while officials tried to catch up with a backlog of calls.
The confusion is understandable. Within four months three new stamp duty taxes have been introduced.
First came the "Special Stamp Duty" for properties that are resold within 36 months. Then came a "Buyer's Stamp Duty", a 15 per cent tax to be paid by non-permanent residents. Although aimed at mainlanders, it impacted all expats who have yet to clock up seven years' residence in the city and qualify for permanent resident status.
And then on February 22 came a doubling of the stamp duty that applies to everyone except permanent residents who are first-time buyers.
Anthony Hindmarsh, founder of Qi Homes, says the stamp duty issue is now so complex he plans to post an explanation of the various new duties in a blog on his company's site. But the message that buying property in Hong Kong is now even more expensive has been heard loud and clear, especially by non-permanent resident expats who have been hit hardest.
Lawyer Tu Do and her husband have lived in Hong Kong for five years. The couple bought their 550 square foot Mid-Levels home three years ago. A little more than a year later they welcomed their first child into the world and have been saving for a larger home since.
They were planning to spend HK$10 million on a new home, which was ratcheted-up by HK$1.5 million thanks to the 15 per cent stamp duty brought in for non-permanent residents at the end of last year. The new double stamp duty that came into effect on February 22 adds another 7.5 per cent to that original HK$10-million budget - making for a total 22.5 per cent in taxes, or HK$2.25 million.
"It's an absurd tax. I don't think it's targeting the right people," says Do.
In two years Do and her husband will be permanent residents, but she doesn't know whether waiting until they are exempt from the tax is the best move financially.
"We have to think hard about what to do because the property prices may be even higher in two years," she says. "I think if we find something really good soon we'll still buy because we need a bigger place now that we have a toddler."
Property agents across the city have seen a sharp fall in sales since the introduction of the tax. Hindmarsh says the tax has made many of his expatriate clients think twice. "Many non-PRs are taking a wait-and-see approach. The demand is still there, but when they do the numbers they may think about investing in another country, such as London," he says.
That's not a viable option for people like Do, who wants to buy a property to live in.
Chris Liem, principal at real estate agency Engel & Volkers, says the new tax has been especially disappointing for expats who have lived in Hong Kong between three and seven years.
"In the first one to three years you're not thinking 'should I buy', but if you're still here after three years then you're probably thinking about committing. I'd been here four or five years when I started looking for a house," says Liem.
The new tax means many of his clients who are coming up to their seven years in the city are waiting to buy, he adds. "Yes, there was an initial disappointment because they wanted to buy and have their own home and it's apparent for them that its harder to do. But the dream lives on."
Liem advises his clients who have decided to wait until they get their PR status to spend the time saving. "If they can save more, they might be able to revise their budgets upwards. Everyone has the building that they want to move into - The Albany, Villa Veneto, Grenville House. People are making plans, preparing to purchase," he says.
Julia Miller is Irish. A carpenter by trade, she and her chef husband sold up in London a year ago and moved to Hong Kong with their two children. They live in Larvotto, the luxury estate in Ap Lei Chau, and she rents studio space in Wong Chuk.
"I didn't come to Hong Kong with the intention of buying, but I realised I could buy a place to work - and would be able to get the money back on rental," says Miller.
That was before the new tax. She'd been seriously eyeing the property market before the new duty came in. "It's made me think twice, for sure. We've got two kids at Hong Kong Academy and have to pay for school fees and debentures," she says.
Although buying their apartment at Larvotto is beyond their means, a studio workspace is still on the cards - just not immediately. "We'll have to hang on a bit. I'm still weighing-up whether to get a workspace in Wong Chuk Hang. Any investment I put in now will be worth twice as much in five years," she says.
So she's not concerned that Hong Kong's property prices are too high? "From where I'm coming from, a two up-two down house in London is now £700,000 [HK$8.2 million]. That's an awful lot of Hong Kong dollars."
As Liem suggests, the reaction to the new duty among expatriates seems to depend on how long they have been living in Hong Kong.
Despite the fact that the new duty has put a damper on her plans, Miller isn't against tax in principal.
But Do is less than impressed. "We've lived in Hong Kong for five years.
"We've contributed, we've worked, we've paid tax, and we've had a baby here. To us this tax seems unfair. The government may consider exempting people like us, that have a real living need."