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Capital gains vote defeated

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LEGISLATORS voted down a motion urging the Government to consider a capital gains tax in an effort to curb property speculation and cool the market.

The motion, sponsored by United Democrat legislator Dr Huang Chen-ya, was rejected by a vote of 31 to 21.

The Government had planned to abstain, but after the debate, the three ex-officio members voted against it.

At the end of the two-hour debate, Secretary for the Treasury Donald Tsang Yam-kuen said a capital gains tax would have to be punitive to provide an effective additional deterrent against speculation.

However, a tax which kept speculators at bay probably would dampen demand among those who wanted to invest long-term.

Mr Tsang said the tax inevitably would reduce the availability of flats for end-users because property developers would respond by cutting supply.

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