Housing official rejects calls to exempt charities from stamp duty
Senior housing official rejects calls from lawmakers to exempt charities from property tax introduced to combat market speculation
A senior housing official has ruled out exempting charities from the cooling measures introduced by the government to rein in the city's runaway housing prices.
Lawmakers yesterday argued that it was unfair to impose taxes designed to control property speculation on charity groups because they would be unlikely to take part in such speculation.
But a senior housing official said giving charities preferential treatment would create a "serious risk of abuse".
A Chinese University poll revealed on Wednesday that 43 per cent of the 821 respondents opposed granting an exemption to charities. And 62.6 per cent of those polled supported the government's market-cooling measures.
"We can ask a charity organisation that wants to buy property to make a declaration, promising that it will not resell it to make money," said Federation of Trade Unions lawmaker Wong Kwok-hing, who supports an exemption.
"If the public knows that the organisation is speculating on properties, it will hurt its reputation," he said at a bills committee meeting yesterday.
Civic Party leader Alan Leong Kah-kit said an exemption should be granted if the purchase was for "prescribed charity works".
But Agnes Wong Tin-yu, deputy secretary for transport and housing, warned that such a policy could create "a serious risk of abuse". "New charitable organisations could be set up in the form of companies to claim the exemption," Wong said.
"The present law does not prohibit a charitable organisation from engaging in investment or trading activities that are not in the course of carrying out their expressed charitable objects. It is difficult for the government to verify if the residential property concerned has been used for charitable purposes," Wong said.
In recent weeks the Tung Wah Group of Hospitals - one of the biggest charity groups in Hong Kong - has stepped up its lobbying efforts to grant an exemption to the anti-speculation tax.
According to its most recent yearbook, the group had rental income of close to HK$378 million in the last fiscal year, from the 109 properties it owns.
The Stamp Duty (Amendment) Bill 2012 imposed a buyer's stamp duty of 15 per cent of the purchase price of properties, payable by all non-permanent-resident buyers and those buying properties through companies. This is in addition to the standard stamp duty of up to 4.25 per cent of the purchase price.
Legislator Abraham Razack, who represents the real estate sector, has proposed an amendment to allow companies wholly owned by Hong Kong permanent residents to have the buyer's stamp duty refunded three years after the purchase, if there is no transfer of shares.
Fellow alliance legislator Andrew Leung Kwan-yuen, who represents the industrial sector, proposed an amendment ending the measures in October 2015.
Wong said the government opposed the two amendments, saying they would create loopholes and diminish the effectiveness of the cooling measures.
Fifteen of the members who attended yesterday's meeting declared that they owned properties, held them through companies or served clients by handling property transactions.
