A pro-democracy lawmaker has asked for closer scrutiny on properties held by Beijing’s office in Hong Kong after a report suggested that some flats had been improperly rented out.

Sai Wan’s China Liaison Office is exempt from paying stamp duty when buying property in Hong Kong for the purpose of housing its staff. However, Apple Daily reported on Monday that some of its properties were in fact rented to outsiders – thus breaching the condition of their tax waiver.

Chen Dong, deputy head of the Liaison Office, denied the accusation and said the flats in question were occupied by staff members.

James To. Photo: inmediahk.net.

Democratic Party lawmaker James To said on Monday that Hongkongers would feel “resentment” if the Liaison Office was, in fact, competing with them in the property market.

“Shouldn’t we look into how many properties there are in Hong Kong, which are owned by the China Liaison Office – or other related companies – and used for commercial activity?” To asked reporters.

If it were true that the flats in question were used for commercial activities like renting, then the stamp duty exemption should not apply, he added.

To also called on Chief Executive Carrie Lam to reflect concerns to China’s leadership during the “two sessions” – the annual meeting of top lawmakers and political advisers which began on Monday.

The Merton, a luxury residential property in Kennedy Town. File Photo: the Merton.

The China Liaison Office has a long history of buying property in Hong Kong, with the most recent purchase being a HK$247.53 million deal for 20 apartments in Kwun Tong.

Since the 30 per cent stamp duty did not apply, the buyer saved as much as HK$74.3 million on the deal, according to an estimate by lawmaker Kenneth Leung.

Local media have estimated that the Liaison Office has bought over 280 properties in the city since the 1997 handover.

According to Apple Daily’s report, a reporter went to the addresses of flats listed under Newman Investment – an investment vehicle –  which included luxury properties such as The Merton in Kennedy Town. The reporter then asked residents if they had connections to the Liaison Office.

China Liaison Office in Hong Kong. Photo: HKFP.

One resident said she was not a staff member, and she rented the flat through a nearby property agent: “This is just a rented place, there is no China Liaison Office,” she was quoted as saying.

Some other residents also said they did not know if the properties belonged to the Liaison Office.

In 2017, the Liaison Office also drew criticism for buying flats which were reserved for local first-time buyers. In that case, the property was bought by a Liaison Office staff member who had permanent residency.

Holmes Chan

Holmes Chan is a reporter at Hong Kong Free Press. He covers local news with a focus on law, politics, and social movements. He studied law and literature at the University of Hong Kong.