Developers urge tax exemption for luxury flats

A powerful group that represents the interests of Hong Kong developers has urged the government to exempt the city's firms from its first property tax aimed at non-local and corporate buyers.

The Real Estate Developers Association also wants luxury flats of more than HK$30 million to be excluded from the special tax, known as buyer's stamp duty, which is set at 15 per cent of the transaction price.

In a letter to the government, Reda says the authorities should specify when they would end the anti-speculation taxes, which it warns will hurt Hong Kong's reputation as one of the world's freest economies.

Stewart Leung Chi-kin, chairman of the association's executive committee, said yesterday that it was "unhealthy" for the government to intervene too deeply in the property market.

Leung said the new tax would open a Pandora's box.

"Targeting overseas investors will only damage our reputation as one of the freest economies in the world," he said. "It will cast a shadow in the minds of international investors. This time it is a tax on buying property; who knows what tax the government will impose next time when other issues arise?"

Leung said the association was asking for the tax to be lifted on corporate buyers, or as a start, at least on "Hong Kong companies of which directors or shareholders are all Hong Kong permanent residents".