The Hong Kong government said on Tuesday first-time home buyers purchasing more then one flat at the same time would be subject to a 15 per cent stamp duty, the latest bid to cool property prices in one of the world’s most expensive real estate markets
PUBLISHED Tuesday, April 11, 2017
[HONG KONG] The Hong Kong government said on Tuesday first-time home purchasers acquiring more than one flat in the meantime would be liable to a 15 percent stamp duty, the most recent offer to cool property price in one of the world’s most costly real estate markets.
Home price in Hong Kong have hopped 364 percent since 2003, while the median month to month family wage has risen only 61 percent, pushing home proprietorship distant for some.
Hong Kong last presented property cooling measures in November 2016, raising stamp duty on property transactions for the first time in three years however the measures had little effect.
“We should suppress three types of demand: speculative, external, meaning buyers from outside Hong Kong, and also investment demand,” Hong Kong leader Leung Chun Ying told reporters.
“The new proposal, which will take effect after midnight tonight, is to ensure that people do not buy more than one unit by using one legal document.”
Mr Leung said a few purchasers had been utilizing one authoritative documents to purchase multiple flats to skirt stamp duty on second homes, pushing up prices across the board.
“If buyers use one legal document to buy more than one residential flat, the relevant transaction will be taxed at 15 per cent,” he said.
Mr Leung, who ventures down in July following a five-year term, brought control in 2012 with a promise to make housing more moderate, however from that point forward, prices have hit crisp record highs.
He emphasised the government’s efforts in raising housing supply, while financial secretary Paul Chan said he expects the potential supply of new flats in Hong Kong over the next three to four years to surpass the December estimate of 94,000 units, hitting a new high.
Beijing-backed approaching leader Carrie Lam has swore to handle the city’s housing issue, which is additionally a top worry of numerous nonnatives working in Hong Kong.
Ms Lam’s objective to cool the property market will be tested by the current convergence of Chinese capital gobbling up a portion of the city’s best plots of grounds at record-breaking costs.
Thomas Lam, senior executive at property consultancy Knight Frank, said the new measure would not have huge affect on developers, but rather would give the average purchaser more chances to purchase a flat.
“This measure does not bigly affect the market, but rather the legislature is making an impression available and to the developers, revealing to them they don’t empower this (multiple) transaction strategy,” he said.
The determined ascent in home prices had renewed speculation that the government may force more property tightening measures, for example, controls on multiple property buys at one time so as to cut the trend.
The Chinese-ruled city has seen a sharp ascent in the quantity of first-time purchasers acquiring multiple properties in one go to abstain from paying a levy, however these cases just take up 4.7 percent of all transactions, Mr Leung said.
Soaring property prices are in stark contrast to the slowdown in the former British colony’s overall economy, result proven from flagging retail sales and sluggish economic growth.
Source: http://www.businesstimes.com.sg/real-estate/hong-kong-slaps-property-tax-to-close-loophole
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