Hong Kong Gazettes Stamp Duty Hike Amendment
The Stamp Duty (Amendment) Bill 2017, which implements a further stamp duty increase to cool Hong Kong’s housing market, was gazetted on January 27, and will be introduced into the Legislative Council on February 8.
The Bill includes the demand-side management measure announced on November 4, 2016. With effect from the following day, a new flat rate of 15 percent was introduced for the ad valorem stamp duty (AVD) chargeable on all transactions for residential property acquired by individuals or companies.
A government spokesperson confirmed that Hong Kong’s “current policy is to accord priority to the self-use home ownership needs of Hong Kong Permanent Residents (HKPRs). Thus, the new measure will continue to adopt the exemptions provided for under the existing [stamp duty] regime, such that a HKPR-buyer who does not own any other residential property in Hong Kong at the time of acquiring residential property will continue to pay AVD under the lower rates.”
On January 16, Hong Kong’s Secretary for Financial Services and the Treasury, K C Chan, said that the further stamp duty increase introduced had already achieved its objective of cooling the city’s property market.
“We think the latest round of stamp duty increase has really introduced a period of cooling in the market,” he confirmed. “At this point in time, we believe that the latest round of stamp duty has done the job as we intended.”