The number of property transactions rose alongside prices.
The Inland Revenue collected 13% more in tax revenue or $328.6b for 2017-18, buoyed by higher stamp duty receipts.
"The property price has increased quite dramatically in 2017. On top of that, the number of property transactions in 2017-18 has also increased,” said Commissioner of Inland Revenue Wong Kuen-fai. “"So the increase in the number of property transactions in 2017 will account partly for the increase in stamp duty."
Home prices in Hong Kong are amongst the most expensive in the world with some residents turning to micro flats or homes less than 20 square meters just to get on the housing ladder.
Profits tax collection stood at $139.1b, similar to the previous year, and salaries tax collection increased by 3% to $60.8b. Wong forecasts total revenue collection at $343.3b for the coming year.
The government is also rolling out a two-tiered tax system from 2018-19 which slashes the tax rate for the first $2m of company profits to 8.25%. Profits above that will be subjected to 16.25% tax rate.
The new tax regime aims to reduce the tax burden on businesses especially SMEs and startups. “A tax-paying corporation or unincorporated business could save up to $165,000 and $150,000 each year,” a government press release noted.
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