HONG KONG: Hong Kong has axed all property transaction taxes in a bid to revive the depressed housing market, Financial Secretary Paul Chan said in his annual budget speech Wednesday (Feb 29).
The finance hub’s economy was initially buoyed by China’s post-pandemic reopening but recovery has since slowed and residential property prices are at a multi-year low.
Chan said Hong Kong would scrap three types of stamp duty with immediate effect, reversing measures introduced more than a decade ago to curb speculation and rein in sky-high property prices.
“After prudent consideration of the overall current situation, we decide to cancel all demand-side management measures for residential properties with immediate effect,” Chan told the legislature.
The cancelled taxes include a stamp duty of 15 per cent of the property price imposed on buyers who are not Hong Kong permanent residents and 7.5 per cent on those purchasing a second home.
“No Special Stamp Duty, Buyer’s Stamp Duty or New Residential Stamp Duty needs to be paid for any residential property transactions starting from today,” Chan said.
“We consider that the relevant measures are no longer necessary amidst the current economic and market conditions.”
Hong Kong’s economy is expected to grow 2.5 per cent to 3.5 per cent this year, Chan said. The special administrative region expanded 3.2 per cent in 2023.
Hong Kong’s housing prices, once among the most expensive in the world, have plunged 20 per cent since their 2021 peak, dragged down by fragile market sentiment and a rise in interest rates. Some analysts expect a further 10 per cent drop this year.
Source: Agencies/at
