Government reveals tightened stamp duty has been effective

Buyers have been stopped from evading tax by purchasing multiple new homes.

The tightening of the stamp duty mechanism to stop buyers from evading tax by purchasing multiple new homes under a single contract has been effective.

Secretary for Transport & Housing Prof Anthony Cheung made the statement to the media after attending a radio programme.

The Government announced on April 11 that buyers must pay the 15% stamp duty according to the number of new homes purchased, rather than a single contract.

Cheung said tightening the exemption arrangements for Hong Kong permanent residents acquiring more than one property under one instrument is to prevent investors from evading the 15% stamp duty.

"Of course, once this tightening up measure had been announced, the effect had been realised, because anyone who acquires multiple properties under one instrument will be subject to the 15% stamp duty.

"The purpose of the stamp duty is to give priority to genuine home owners who would like to acquire property for their own consumption, while investor buyers have to bear a higher transaction cost.

“This is one way to manage demand. We think we have achieved that purpose.”

He said property prices have been affected by the supply and demand situation and the global environment.

“In Hong Kong right now, because demand is still very robust and supply is still lagging behind demand for various reasons, and we are in a global environment where interest rates are very low and credit is so easy to get, so there is lots of money getting around whether in Hong Kong or other cities, we all face the problem of higher housing prices.

“And in the case of Hong Kong, depending on how the global environment turns out, we have to double our efforts in making more supply available and that is the most challenging task for any government, whether this government or the next government.”