Govt urged to ease property tax, investment rules
A local real estate leader says the government should cut property taxes to aid an industry rebound. Photo: RTHK
The head of an association representing real estate developers in Hong Kong on Tuesday called on the government to cut property taxes and ease investment rules to prop up the sluggish market.
The call comes ahead of the Chief Executive's Policy Address next month and as cash-strapped developers continue to reduce inventories by lowering prices.
In an interview with RTHK, Stewart Leung, chairman of the executive committee of the Real Estate Developers Association of Hong Kong, said that while residential units valued at HK$4 million or below now enjoy a nominal stamp duty of HK$100, this could be extended to more expensive properties.
"If you loosen the upper limit to be applied for properties valued at HK$6 million or below, up from the current HK$4 million, it will also attract potential buyers who are eyeing units valued around HK$6 million.
"And when you have more people buying properties, you'll gain more stamp duty in the end, because even if you suffer losses in tax revenue in the short term, in the long term if there are more and more transactions, it will also make up for such losses," he said.
Leung, who has spent over six decades in the real estate sector, said the association believes the current highest property tax rate of 4.25 percent for homes valued over HK$20 million is reasonable and needs no change.
But he proposed the government revise the rules for those seeking residency in Hong Kong by investing HK$30 million or more under the New Capital Investment Entrant Scheme.
Under the scheme launched last year, up to HK$10 million of the minimum investment necessary can be accounted for by residential property, as long as the property in question is valued at HK$50 million or above.
"For some investors, they might not only invest HK$50 million, they can even invest HK$500 million," Leung said.
"But if you set a cap that only HK$10 million can be counted in the scheme to meet the minimum investment requirement, then the cap will not be attractive for them to invest in properties. So what we are proposing is why don't you raise the bar to HK$20 million, which could also drive the middle-class market."
Leung said he forecasts the city's market will rebound and home prices could rise by four to five percent by the end of the year.
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