Property market jitters possible amid uncertainty over law to double stamp duty

Property owners are set to be disappointed if they think the delay in passing legislation to enact a doubling of stamp duty will cause prices to rise.

According to industry observers, the delay will not materially affect property prices. However, the uncertainty risked weakening investor and buyer confidence.

The extra stamp duty has been collected on transactions since February last year, but will not be paid to the government until it is enshrined in law.

"If the bill cannot be passed this year, this will not have any practical impact on the market," said Cusson Leung, head of property research at investment bank JP Morgan. He said the government would continue to chase the tax even if the bill was not passed this year.

The Legislative Council is expected to vote on the bill and an amendment by legislator Kenneth Leung by tomorrow. Under Leung's amendment, companies that hold on to properties for more than three years would get a refund of the extra stamp duty if the properties were used for their own business.

The amendment, which the government was once confident would be vetoed by the legislature, may now only need one more vote from geographical- constituency lawmakers to pass after radical group People Power said it might make a U-turn and back the amendment.