New stamp duties trigger last minute push for flat sales

Real estate agents staged a last-minute flat sales push to beat a midnight deadline for the introduction of a new set of measures aimed at cooling down Hong Kong's red-hot property market.

In the five hours after Financial Secretary John Tsang Chun-wah and Hong Kong Monetary Aurthority chief Norman Chan Tak-lam announced new measures to head off a property bubble yesterday evening, asking prices dropped by as much as 3 per cent in some cases.

Among those seeking last-minute sales were Sun Hung Kai Properties, which brought forward the sale of 92 flats at The Wings II development in Tseung Kwan O which were supposed to go on sale today.

Tsang announced a doubling of stamp duties for homes and non-residential properties valued at more than HK$2 million and it was announced that buyers of non-residential properties would be required to pay stamp duty earlier.

Instead of paying upon conveyance, the payment should be made once the sales agreement is signed to reduce the incentive for speculation. For flats valued at HK$2 million or less, stamp duty will increase to 1.5 per cent of the transaction value - up to 300 times the current flat rate of HK$100. The measures aim to tackle speculation on small to medium-sized flats, parking spaces, shops and hotels.

They come just four months after the government announced additional stamp duties to cool demand from non-locals and companies. Tsang admitted he did not have a "silver bullet'' to deal with the housing problem "in one shot". "We are doing it in an incremental manner," he said. "We have done a number of management measures while we are increasing the supply of flats in the market.