Hong Kong Will Consider Developers' Views on New Stamp Duty

Hong Kong Will Consider Developers' Views on New Stamp Duty

Hong Kong’s Transport and Housing Bureau intends to consider the suggestions made by the Real Estate Developers Association (REDA) when drafting the legislation for the enhanced Special Stamp Duty and introduction of the Buyer's Stamp Duty.

From October 27 this year, the Hong Kong government increased the rates of the existing Special Stamp Duty for properties held for less than three years and introduced the Buyer’s Stamp Duty, to stop speculation in Hong Kong’s residential property market. The Buyer’s Stamp Duty is not applicable to Hong Kong’s permanent residents, but all other property buyers, including local and non-local companies, are required to pay an additional duty of 15% on top of the existing stamp duty.

REDA recently argued that these measures targeting company purchasers would frighten off international investors and damage Hong Kong’s reputation as one of the freest economies in the world. They insist that exemptions should be granted to Hong Kong companies whose directors/shareholders are Hong Kong permanent residents and the sunset clause should be included into the measures.

In response, the Bureau pointed out that the intention of the policy was to provide priority to resident buyers by reducing the ability of non-residents to purchase properties. However, now the Bureau changed its mind, perhaps because of the effect the increased Special Stamp Duty rates and introduction of the Buyer’s Stamp Duty could have on Hong Kong’s reputation

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