New stamp duty bill gives Hongkongers with two properties breathing room

Stamp Duty (Amendment) Bill also lets authorities impose flat 15 per cent tax on non-first-time buyers

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Then chief executive Leung Chun-ying rolled out the measure in 2016 in an attempt to cool a red-hot property market. Photo: Nora Tam

Published: 10:26am, 12 Jan 2018Updated: 5:10pm, 12 Jan 2018

Hong Kong’s legislature on Thursday passed a stamp duty amendment bill allowing homeowners holding two flats a total of 12 months, up from the original six months proposed in the government’s amendment, to offload their first property to avoid paying the tax.

The Stamp Duty (Amendment) Bill also allows the authorities to impose a flat 15 per cent stamp duty tax, up from the previous range of 1.5 to 8.5 per cent, on non-first-time homebuyers.

The new tax rate has been in effect since November 2016, after then chief executive Leung Chun-ying rolled out the measure in an attempt to cool a red-hot property market in the world’s least affordable city.

The tax covered non-first-time individuals and corporate buyers. A government amendment allowed the buyer of a second flat to obtain a full rebate if they managed to sell their first flat within six months of the new flat being bought. The policy was designed to encourage people to give up flats they did not live in so they would be available on the market.

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Some lawmakers, such as Democratic Alliance for the Betterment and Progress of Hong Kong vice-chairman Holden Chow Ho-ding, had said that six months was not long enough for people to offload their first property and suggested that the rebate period be extended.