Chief Executive John Lee announced on Wednesday a partial rolling back of the “spicy” property cooling measures, including cutting buyers’ stamp duties on new homes by half, with immediate effect.
The ad valorem stamp duty (AVD) is a stamp tax that must be paid when a property is transferred. First-time buyers are charged a specified tax rate based on the property price.
The Buyer’s Stamp Duty (BSD), also known as the non-Hong Kong permanent resident stamp duty, targets overseas investors and corporates and is levied on top of the AVD and Special Stamp Duty (SSD). The tax rate is now halved from 15% to 7.5% of the property price.
The SSD, which was originally not required to be levied if the property was resold after three years, has now been shortened to two years, after which the seller does not need to pay the additional 10% SSD.
To attract more overseas talents to buy residential properties in Hong Kong, the Policy Address has introduced a stamp duty suspension arrangement. Under the new arrangement, these buyers will no longer need to pay a refundable stamp duty at the time of property acquisition, but are only required to do so when they fail to become permanent residents after residing in Hong Kong for seven years.
Another highlight to draw in overseas investors is the implementation of the “Capital Investment Entrant Scheme”. Qualified investors who have invested HK$30 million (USD 3.83 million) or more in stocks, funds, bonds and other assets (excluding real estate) in Hong Kong can apply to come to the city through the scheme. The candidates are mostly well-off, and can give the property market a much-needed boost.