Hong Kong property market not expected to get big boost from stamp duty change, industry pins hopes on 2023 budget

Analysts doubt a tax-refund incentive announced by the chief executive in his policy address will do much to revive demand

Next year’s budget speech could yield further easing policies if home prices fall 15 per cent, they say

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A residential building under construction in Hong Kong, with Lion Rock in the background, on October 11, 2022. Photo: Dickson Lee

Published: 11:00am, 21 Oct 2022Updated: 5:54pm, 21 Oct 2022

Rolin Zhou, a Shanghai native who has been studying and working in Hong Kong for three years, was planning to buy a flat valued at as much as HK$6.5 million in the city when news reports a week ago said the government might relax the heavy stamp duties non-locals must pay on property transactions.

But her hope was dashed on Wednesday.

In his first policy address, Hong Kong Chief Executive John Lee Ka-chiu announced a refund of the extra stamp duty eligible non-locals pay when buying Hong Kong residential properties – if they remain in Hong Kong for seven years and obtain permanent residence.

“I will not benefit from the policy,” said Zhou, who moved to Hong Kong in August 2019 under Immigration Arrangements for Non-local Graduates, part of the government’s scheme to attract talent. The upfront cash tax (30 per cent of property value) is out of her budget, and the refundable stamp tax “does not make the purchase any easier”, she said.

People walk past residential property advertisements displayed in the window of an estate agency in Taikoo Shing on October 11, 2022. Home prices have dropped 6.5 per cent in the first eight months of the year. Photo: SCMP/ Dickson Lee

Analysts echoed Zhou’s disappointment, saying that the refund policy will not provide enough of a spark to reverse a trend of falling home prices in the city.