Hong Kong doubles stamp duty to cool property market
The city has unveiled its latest bid to calm an overheated property market which boasts some of the world's priciest apartments.
Policymakers have also taken aim at a rising tide of speculation in shops and offices by introducing a reduced timeframe for stamp duty payment on non-residential property. Photo: REX FEATURES
By Denise Roland
4:14PM GMT 22 Feb 2013
Hong Kong's new measures include a doubling of stamp duty on the city's most expensive properties, up to 8.5pc from 4.25pc, and replacing a HK$100 (£8.40) flat fee with a 1.5pc tax rate for property worth up to HK$2m.
The provisions, which aim to deter overseas buyers who take on speculative investments in Hong Kong property, do not extend to permanent residents with a genuine need for housing.
Policymakers have also taken aim at a rising tide of speculation in shops and offices by introducing a reduced timeframe for stamp duty payment on non-residential property.
Property prices in the Asian financial hub have surged 120pc from a low in 2008, according to government officials. The rise, driven by low interest rates and wealthy mainland Chinese snapping up homes, pushes home ownership beyond the reach of many of Hong Kong's seven million inhabitants.
"The risk of an asset bubble is increasing," John Tsang, Hong Kong's finance minister, told a news conference on Friday.
"Maintaining a healthy, stable property market will be our ongoing endeavour. We shall continue to monitor the market closely and I will not hesitate to introduce further measures when necessary," he added.
Since 2009, Hong Kong policymakers have taken a series of steps to curb price rises, such as a 15pc property tax on foreign buyers, mortgage restrictions and taxes on quick resales.
The Hong Kong Monetary Authority, the territory's de facto central bank, also announced it would tighten mortgage loans by subjecting applicants to a stress test to prove they could continue repayments should the interest rate rise to 3pc.
