Is it high time to waive stamp duty for first-time home buyers?

Some buyers may not be able to pay the upfront cash burden, said EY in its budget wishlist.

Accounting and professional services firm EY pushed for a stamp duty relief for first-time home buyers to relieve individual tax burden on cash-constrained consumers who wish to enter Hong Kong’s heated housing market. 

“First-time home buyers are generally more cash constrained than other buyers and stamp duty can represent an upfront cash burden on top of a down payment and legal fees,” said EY People Advisory Services Partner Robin Choi. 

The proposal entails waiving the stamp duty for the first-time principal home purchase of a Hong Kong permanent resident. The value of the residential property must not exceed $6m. 

To alleviate tax burden on renters, EY similarly recommends tax deductions for rental payments of up to $100,000 a year with respect to taxpayer’s principal home. This will be done as an interim measure for a maximum of five years and excludes public housing.