Twin relief measures unveiled yesterday for homeowners would deliver only minor benefits and would not boost confidence in the property market, analysts said.
Salaried owner-occupiers would be up to $8,500 a year better off if they claim the $50,000 increase in mortgage interest tax deductibility at the maximum rate of 17 per cent. The figure is $7,500 at the standard 15 per cent tax rate.
But that was an 'ungenerous' offer, said Yvonne Law, tax partner at Deloitte Touche Tohmatsu. The move would cost the Government about $1 billion over the next two years.
The second new measure - a guideline simultaneously issued by the Hong Kong Monetary Authority (HKMA) that allows banks to lend up to 100 per cent of the value of properties now caught in a 'negative equity' trap - was unlikely to attract many new lenders, other analysts said.
'It's kind of smart because they seem to have given something. But they've left it to banks to take it up - and it is unlikely many will want to do that,' said Todd Martin, head of financial institutions research for Deutsche Bank in Hong Kong.
Mr Tung said he would propose that the Legislative Council raise the tax-deduction ceiling for housing-loan interest to $150,000 a year for this year and the next year of assessment. The ceiling now is $100,000 and homeowners may claim it a maximum of five times.