Hong Kong aims to introduce a progressive rating system for residential properties that would see owners of pricier flats paying more in property rates, the city’s financial chief announced on Wednesday as the latest budget was revealed.
Rates are a form of tax paid by property owners in Hong Kong, charged at a percentage of the rateable value of the property, which is its estimated annual rental value. Financial Secretary Paul Chan said the implementation of a progressive rating system could earn the government HK$7.6 billion annually.
For properties with a rateable value of HK$550,000 or below, it was suggested the rates will be charged at the current level of 5 per cent. For units with a higher rateable value, the first HK$550,000 would be charged at five per cent and the subsequent HK$250,000 will be charged at 8 per cent. Units with a rateable value exceeding HK$800,000 will be charged at 12 per cent.
“This can better reflect the “affordable users pay” principle,” Chan said.
The government also proposed restricting property rates concessions for domestic properties to apply only to individual people on only one residential property, meaning companies that owned domestic properties would not be able to apply for rates concessions.
When asked whether the progressive rating would impact the middle class, Chan said that the government had evaluated “middle class properties” such as Kornhill Garden and Taikoo Shing, and he expected that such properties would not be effected.
Housing supply
The government has identified land for around 330,000 public housing units to satisfy the demand in the next decade, Chan announced on Wednesday.
According to the financial secretary, around 350 hectares of land were found, and one-third of the 330,000 units would be completed in the next five years, with the rest to be launched in the following five years.
Chan also said that enough land had been secured for more than 17,000 transitional housing units, and that an expected 11,000 would be launched by the end of next year.
HKFP’s budget coverage in full:
- HK$10,000 consumption vouchers for all
- Gov’t pledges over HK$54b to fight Covid-19 ‘on all fronts and at full speed’
- One-off tax cuts, property rate concessions, electricity subsidies for residents
- Economic rebound surpassed global growth last year, but will worsen under Covid
- HK100 billion earmarked for Northern Metropolis plan
- Landlords will be barred from terminating the tenancies of some small firms
- Police vehicle and gear budget to quadruple to HK$508 million
- Prisons to spend over HK$677,000 per detainee next year with 10% budget boost
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