Stricter Property Market Measures for Hong Kong

Less than two years after the introduction of the Special Stamp Duty (SSD), the Hong Kong Government has released details of a new round of measures to “alleviate the demand for housing” in Hong Kong.

Financial Secretary John Tsang (Center) at Central Government Offices.

The two prongs of the governments new measures are a new Buyer’s Stamp Duty (BSD) and an extension to the existing SSD in both duration and the amount of duty.

Buyer’s Stamp Duty

The BSD adds a 15% Stamp duty to the purchase of residential property by non-Permanent Residents of Hong Kong. It takes 7 years to qualify for Permanent Residency so foreigners who have lived in Hong Kong for less than 7 years essentially pays 15% more to buy a property. The BSD (if any) is in addition to the SSD and existing Stamp Duty rates payable on property transactions.

Special Stamp Duty

The SSD has increased from the previous 2 years to 3 years now and the percentage of duty payable has also increased.

If you hold a property for less than 6 months you will pay 20% SSD; for 6-12 months the rate is 15% and 10% if the property is held for between 12 and 36 months.

The Government proudly announced that resales within 12 months have “virtually disappeared” while the number of cases of resale within 12 to 24 months has more than doubled from 83 to 218 from March 2012 to September 2012. There surely are innocent homeowners caught up in this that are simply trying to relocate for their children’s schooling, location of work or simply upgrading as the family grows. The Government seems to think those reselling within 24 months (now 36 months) should be punished.