Property rates will be waived in the coming financial year, subject to a ceiling of HK$5,000 per quarter, as part of the budget measures.
As a result, owners of about 99 per cent of homes and 85 per cent of other properties will not have to pay in 2008-09. The proposal will cost the government HK$11.2 billion.
Also announced was a one-off reduction of 75 per cent on property taxes for 2007-08, up to HK$25,000. The reduction will be reflected in taxpayers' final tax payable for the year.
This measure will cost the government HK$680 million, benefiting 100,000 taxpayers and covering 115,000 properties.
However, some observers said that because the real estate market had been booming for some time, helped by reductions in interest rates, little additional stimulation was needed.
'I don't think the measures will stimulate the property market,' said Wong Leung-sing, associate director for research at Centaline Property Agency. He said the reduction in property tax was a one-off and would benefit only people who had bought a property last year or earlier, but waiving rates would bring relief to property owners. Mr Wong estimated that the owner of a flat in Taikoo Shing, for example, could save nearly HK$20,000 over the course of a year.
However, he believed transactions in the residential sector would not be stimulated simply because of these moves, as the maximum HK$25,000 rates exemption was insignificant when a flat could be worth millions of dollars.
