CY Leung seeks to plug housing loophole with stamp duty rise for multiple flat purchases
Local first-time home buyers purchasing multiple flats at the same time will now have to pay 15 per cent stamp duty
First-time Hong Kong homebuyers purchasing multiple flats in one go will now have to pay a 15 per cent stamp duty as the government finally seeks to plug a legal loophole open to exploitation by speculators.
The loophole was first reported by the Post last November, days after the government, in a bid to curb runaway property prices, more than doubled the stamp duty to a flat rate of 15 per cent for all residential purchases. It did not apply to first-time buyers, allowing speculators among them to lump several purchases together under a single transaction deal.
The new cooling measure, which came into effect at midnight, means those buying several flats with just one sales and purchase agreement will now have to pay 15 per cent stamp duty for each of the properties.
“The new proposal ... is to ensure that people do not buy more than one unit using one legal document,” Chief Executive Leung Chun-ying said yesterday. “This is very much in line with our overall policy to give preference, a priority to ... Hong Kong people.”
The announcement came a day before Cheung Kong Property’s scheduled sale of 152 units in a new development in North Point, where a four-bedroom unit is priced as high as HK$40,000 per square foot.
Media reports revealed that since November, more than 420 registered sales and purchase agreements for more than 950 flats involved single buyers acquiring more than two units at a time.
In one case, a buyer snapped up 15 units for more than HK$145 million at K City in Kai Tak in a single transaction.
Financial Secretary Paul Chan Mo-po yesterday cited figures showing the number of cases of multiple purchases under a single agreement jumped from around 50 in February to 180 in March. Since last November, the number has been about 20 to 30 a month.
Under the old system, the Inland Revenue Department regarded such acquisitions as one transaction only, thus allowing buyers to evade stamp duty.
Stewart Leung Chi-kin, chairman of the executive committee of the Real Estate Developers Association, criticised the government for revising policy too frequently. “It gives the impression that it had not given [the old measure] thorough consideration when introducing it [last November],” he said.
Transport and housing minister Anthony Cheung Bing-leung denied the government had been negligent about the loophole, insisting it had only recently become a growing concern.
“The measures will be useful in the short term,” property analyst Alfred Lau said. “I expect those buyers who purchase more than one unit will disappear immediately.”