UK developer offers stamp duty subsidies in London project
Euroterra seeks to mitigate tax change impact as London luxury project goes on sale in HK
Stamp duty subsidies are not only a popular tactic for Hong Kong developers to draw buyers to new projects, but they have also become an incentive for a British developer to lure Asian buyers.
Euroterra Capital plans to offer stamp duty land tax incentives for buyers when its London luxury project, Royal Residence, goes on sale in Hong Kong over the weekend.
The developer would pay the difference in the old and new tax systems on up to 2.35 per cent of the price of the properties, said Neil Jensen, the head of operations for Asia at Fraser & Co, which markets the project.
Previously, the tax was charged at a single rate for the entire price of a property. From December 4 last year, the British government charged the levy at increasing rates for each portion of the price.
For instance, nothing is charged on the first £125,000 (HK$1.4 billion) of the property price, then 2 per cent on the next £125,000. The maximum rate of 12 per cent is levied on the portion above £1.5 million.
Under the changes, those buying residential property for £937,500 or less will pay the same or, in most cases, less tax than they would have paid under the old rules.