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.