Tax man rejoices as Happy Valley villa buyer hit with HK$90.54 million stamp duty
Eye-watering levy comes on top of a thumping HK$301.8 million price tag for the 4,571 square foot, five-bedroomed property on Blue Pool Road
A corporate buyer is likely to be asked to stump up the highest stamp duty on a residential property in Hong Kong since the levy was nearly doubled earlier this month, after splashing out HK$301.8 million on a new luxury semi-detached home in Happy Valley.
The buyer looks set to be charged a total of 30 per cent in stamp duties by the Inland Revenue Department, which works out at HK$90.54 million.
Hang Lung Properties said the 4,571 square-foot semi-detached house – number 25A, within a development comprising 18 semi-detached houses at 23-39 Blue Pool Road in Wong Nai Chung – was sold to a corporate buyer through tender.
The deal, signed on November 15, comes just ten days after the government raised property transaction stamp duty to 15 per cent for all residential purchases, except for first-time buyers , and corporate buyers, to dampen soaring house prices.
Until then, the highest levy for residents was 8.5 per cent.
On top of the stamp duty, the corporate buyer of the Blue Pool Road house will also likely to be required to pay another 15 per cent “buyer’s levy”, which came into effect on October 2012.
That levy applies to non-permanent residents, in a bid to discourage buying interest from mainlanders, who accounted for 40 per cent of new flat sales three years ago.
The thumping total HK$90.54 million charge alone would be enough buy nearly four 930 sq ft units of Swire Properties’ new Arezzo development at 33 Seymour Road in Mid-Levels.
The HK$301.8 million price tag represents HK$66,025 per square foot, Hang Lung Properties told South China Morning Post.
Thomas Lam, head of valuation and consultancy at Knight Frank, said units sold through tender are not subject to government restrictions regulating new project launches by developers.
“Units offered for sale through tender need not publish the price list ahead of the project launch,” he said.
“It is a kind of private agreement between the vendor and the buyer under the terms of confidentiality.”
But Lam added developers in such cases would be likely to provide subsidies to offset the levy in a bid to attract buyers.
The three-storey semi-detached house has five en-suite bedrooms, a maid’s room, a 546 sq ft courtyard, 1,344 sq ft terrace, and a 322 sq ft of parking spaces.
As well as the sale of 25A, Hang Lung said another semi-detached in the development, number 39A, had been sold for HK$288.3 million, or HK$63,072 per sq ft at the development. But that was sold on October 18, according to the government website, before the latest rise to 15 per cent on November 5.
The latest information from Centaline Property Agency shows that the volume and value of new luxury homes sold in Hong Kong in the first 10 months have already exceeded the whole of last year.
There have been 2,554 transactions worth HK$12 million or more, 7.9 per cent more than 2,367 deals done in 2015. The total transaction value in that range has already hit HK$73.41 billion, compared with last year’s annual total of HK$77.98 billion.
In October alone, Centaline said 722 luxury homes were sold in the first and secondary market, an 8.7 per cent rise on September, and a 21.1 per cent increase in value to HK$19.19 billion.