Hong Kong’s largest pro-Beijing party has suggested cutting the stamp duty on residents’ purchases of second properties from 15 per cent to six per cent, in an attempt to stimulate the economy.
Speaking on an RTHK programme on Wednesday, Holden Chow, vice-chair of the Democratic Alliance for the Betterment and Progress of Hong Kong, said the decade-old “spicy measures” – originally imposed to curb soaring prices – should “keep up with the times.”
He said the economic environment in which the government imposed measures to curb demand and rampant speculation was greatly different from the current situation.
“The international economy and Hong Kong’s economy are not the same as they were ten years ago” Chow said, suggesting that buyers’ stamp duty on second property purchases should be cut by more than half, down to six per cent.
“I believe that there’s a large demand, so this would alleviate buyers’ tax burden,” he added.
Imported talent
Chow also proposed exempting professionals who have settled in Hong Kong via various talent schemes from paying stamp duty when purchasing properties.
They would only have to pay if they leave the city and sell their homes without fulfilling the permanent residency requirement of seven years’ residence.
Cutting those taxes would incentivise professionals to settle in Hong Kong, buy homes, and stimulate the economy, he added.
Finance minister Paul Chan earlier this week said he would be “pragmatic” in deciding whether to curb stamp duty, as recommended by embattled property developers: “We will consider this pragmatically, with reference to market conditions and the environment in which the policy was formulated.”
He added that corporate taxes would make up for the expected shortfall in government revenue, and the city’s economy would remain stable in the medium to long term.
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