Scrapping Stamp Duty Helps Economy

(To watch the full press conference with sign language interpretation, click here.)

Secretary for Financial Services & the Treasury Christopher Hui today said the abolition of the Doubled Ad Valorem Stamp Duty on non-residential property transactions can address people's liquidity needs during the current economic downturn.

Mr Hui told reporters at a press conference on the Policy Address initiatives this afternoon that it is difficult to estimate the effect the abolition of the stamp duty would have on government revenue.

“In terms of the Doubled Ad Valorem Stamp Duty on non-residential property transactions, I am sure as you can imagine, with this reduction in rates, there could be two sets of factors at play. On the one hand, there could be potential stimulation of transactions that may bring in more revenue.

“At the same time, there could be other factors which will result in a reduction in revenue because it is a reduction in rates.

“So I think the ultimate outcome of this exercise will be subject to a whole range of factors which may offset each other, so it is very hard for us to provide an estimate in terms of the actual revenue impact.”

Mr Hui stressed that the stamp duty rate adjustment, which took effect today, was not aimed at boosting tax revenue.

“If you go back to the aim of this proposal, the whole idea is not for revenue creation purposes, it is really to allow those owners who are in possession of such properties to have a way to go in terms of cashing in these properties to facilitate their liquidity flow at this rather challenging economic time. So that is something that we have in mind when we crafted this whole policy.”