More action needed from Carrie Lam as Beijing targets developers
- With housing shortage a root cause of discontent, government finally moves on a vacancy tax and central government does not want measures to end there
The government is at long last taking a concrete step to address a cause of social discontent underlying months of protest triggered by the now withdrawn extradition bill – a severe shortage of land and affordable housing.
A year after Chief Executive Carrie Lam Cheng Yuet-ngor unveiled a vacancy tax on property developers who hoard new flats, officials will send legislation to lawmakers next month.
And in a commentary in the central government mouthpiece People’s Daily, Beijing has made it clear it expects Hong Kong to take the more radical approach of using existing powers to resume hoarded land. The article targets developers and claims housing is an “important root cause” of people taking to the streets.
While overdue, the move to introduce the vacancy tax is an important step towards curbing the property market. The bill will target all newly completed flats – unsold and not rented out – for more than six months in a year.
The proposed tax rate will be equivalent to two years of rental income calculated by government specialists. A populist measure that attracted bipartisan support when announced amid soaring prices, it may not have such a smooth passage in the wake of recent political turmoil, though it seems assured of approval ahead of district council elections.
It should be a cue to lawmakers to focus more on the bigger picture of the city’s core, long-term interests and its young people’s prospects, which are becoming increasingly clouded by deep-rooted social issues.