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Hong Kong Abolish All Property Curbs to Save Property Market

Hong Kong Abolish All Property Curbs, Will It Save The Market?

Hong Kong scrapped all decade-old property curbs

Under heavy pressure from Hong Kong developers and the city’s elite, finance chief, Paul Chan has scrapped all property curbs. Political heavyweights and economists have previously said that the removal of property cooling measures will boost the lacklustre property market without causing home prices to soar.

All property cooling measures on the Hong Kong property market have been removed with immediate effect. This includes a Buyer’s Stamp Duty (BSD) that targets non-permanent residents and a New Residential Stamp Duty (NRSD) for second-time purchasers. 

All of the decade-old cooling measures aimed at curbing speculation have been scrapped with immediate effect in a bid to revive Hong Kong’s depressed property market, with lived-in home prices falling for the ninth straight month in January to a level last seen in 2016.
Fresh funding has been earmarked for energising tourism while salary and profit taxes have been reduced to ease the financial burden on the public and small and medium-sized enterprises amid the government’s dire financial health.

The financial secretary has pledged to take a more targeted approach to spending this year and ditch consumption vouchers for residents as the city’s deficit has ballooned to HK$101.6 billion, potentially leaving Hong Kong’s fiscal reserves at their lowest in a decade.

Homeowners will no longer need to pay a Special Stamp Duty (SSD) if they sell their home within two years.
“After prudent consideration of the overall current situation, we have decided to cancel all demand-side management measures for residential properties with immediate effect, that is, no SSD, BSD or NRSD needs to be paid for any residential property transactions starting from today,” Paul Chan says.

“The boost will not be substantial,” said Kathy Lee, head of research in HongKong at Colliers International Group.

Property market curbs lifted

Hong Kong has abolished all buy-side property tightening measures for residential properties with immediate effect.

Stocks of Hong Kong developers rose after Financial Secretary Paul Chan scrapped property cooling measures in a bid to bolster the sector, which has been weighed down by high borrowing costs and weak economic sentiment.

In his budget speech on Wednesday, Chan announced that Hong Kong will withdraw all buy-side tightening measures for residential properties and waive stamp duties payable on the transfer of REIT units with immediate effect.

The finance chief says scrapping all cooling measures has taken into account the external and internal economic situation, and he considers there is “now room to make further adjustment to the relevant measures and other supervisory policies pertinent to property lending where appropriate, under the premise of maintaining the stability of the banking system”.

He says the Monetary Authority will make an announcement later on Wednesday.

The decision follows the government’s move last October to halve buyers’ stamp duty for non-permanent residents and for additional properties. The move brought both down to 7.5 per cent from the previous 15 per cent.

There was also the introduction of a stamp duty suspension arrangement for incoming professionals’ acquisition of residential properties, which Chan says has been well received by talent, with more than 500 applications approved.

(Source: EdgeProp, CNBC)

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