Developers slash unsold home prices as vacancy tax kicks in

Paliburg Holdings and Regal International started offering discounts on vacant units.

Hong Kong developers are starting to cut home prices in an effort to dispose of unsold flats as the government’s earlier tax on vacant properties kicks into effect, reports South China Morning Post.

Also read: Developers may build smaller units amidst vacancy tax

Paliburg Holdings and Regal International have already trimmed as much as $10m off the selling price of one of their 12 unsold Yuen Long villas to $29.4m after they have remained unsold since 2016.

Another private developer owned by Kwok Kwei-wo and Tang Yuk-kwei have also discounted two units of their village houses in Yuen Long by about 20% after holding on to the units for two years, SCMP added.

“Under the new tax, developers will adopt a more cautious pricing strategy in new luxury launches to ensure all units are sold,” JLL managing director Joseph Tsang said in an earlier report. “Mass residential projects, on the other hand, are likely to be less affected given the sustained demand for smaller units.

Also read: Vacancy tax to dampen land bidding

The government earlier revealed that units that have not been occupied or rented out for more than half of the past year will be subject to a special rate collected annually at 200% of the rateable value. This roughly corresponds with around 5% of the property value as the Lam administration aims to put a halt on the city’s heated property prices which have climbed for the 26th straight month last May.