RESIDENTIAL PROPERTY
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Cheung Kong

Cheung Kong offers a tax salve to attract buyers back to Hong Kong’s property market

For a month, the developer will absorb a 15 per cent stamp duty for second-home buyers at The Zumurud luxury apartments

PUBLISHED : Thursday, 10 November, 2016, 9:17pm
UPDATED : Friday, 11 November, 2016, 4:14am

Cheung Kong Property Holdings has become the first among Hong Kong’s developers to offer a salve to customers, a week after the government doubled the city’s stamp duty to control runaway prices.

For a month until December 15, Cheung Kong said it will foot the bill for buyer who’re liable for a 15 per cent stamp duty on its exclusive The Zumurud apartments in Ma Tau Kok.

“With this incentive, property owners’ home purchase plan will not be affected by the latest rise in stamp duty,” according to a statement by the developer, owned by the city’s wealthiest man Li Ka-shing. The incentive, starting on November 14, is only available to buyers who pay cash, or are able to complete their purchase agreements within 720 days, the statement said.

Hong Kong raises stamp duty to tame surging home prices in the world’s least affordable city

Speculators and second-home buyers have pulled out of Hong Kong’s property market in the one week since the unexpected move by the city’s Chief Executive Leung Chun-ying to cool the residential property market.

“Other developers may follow CK Property’s footsteps if they want to continue selling luxury flats,” said Sammy Po Midland Realty’s residential department chief executive.

The Zumurud -- Arabic for emerald - was first launched in March, with a starting discounted price of HK$28 million. With the special offer, buyers will be able to save at least HK$4.24 million on each unit.

Cheung Kong said it has sold 52 units of the 228-unit project, which was built jointly with Sun Hung Kai Properties’ former chairman Walter Kwok Ping-sheung.

The apartments were relaunched in October with 20 per cent discounts on 23 units released. Nineteen of these units measuring between 1,577 and 1,723 feet will come with special incentives of up to 12 years for completing their sales, in 138 monthly instalments through 2028.

Tenders of a waterfront site in Kwun Tong valued at HK$6.2 billion will close on Friday, in a test of the market’s sentiments in the wake of the government’s market-cooling stamp duty.

Hong Kong’s property stamp duty leaves a gaping loophole

Surveyors estimate the value of the 196,561 square feet site at between HK$7,000 and HK$7,500 per square foot. The site at Off Sin Fat Road close to the Laguna City housing estate will provide a gross floor area of 825,546 feet.

Together with the construction and interest expenses, the total investment cost could be more than HK$10 billion.

“Developers will become cautious in submitting bids after the government’s harsh measures last week,” said Victor Lai Kin-fai, the chief executive of consultancy Centaline Professionals.

Still, developers remain keen for large urban sites as they can reduce their investment risk through consortiums or ventures in their bidding.

“Large site sin urban areas are still sought after, particularly by mainland Chinese developers,” Lai said.

He estimated the total development cost for the Kwun Tong site to be HK$10.7 billion, or HK$13,000 per square foot, after taking into account the construction cost plus interest expenses.