Stamp Duty Rates Carefully Considered

The Government must carefully take into account the impact of relevant arrangements on the property market when considering whether stamp duty rates concerning residential properties should be adjusted, Secretary for Financial Services & the Treasury Christopher Hui said today.

He pointed out that any move to relax demand-side management measures or lower stamp duty rates may stimulate some citizens' demand for local residential properties and lead to a counter-productive result of pushing up property prices when the current housing supply still lags behind demand. Therefore, the Government must act prudently.

“Under the existing mechanism, if a Hong Kong permanent resident acquires a new residential property to replace his/her only original residential property, he/she is required to pay the relevant stamp duty first and claim partial refund of the stamp duty paid after disposing of the original property.

“However, it the relevant requirements are relaxed, it may invite some owners without genuine intention to dispose of their original properties to, under the guise of property replacement, defer payment of stamp duty or hold more than one residential property for a longer period with a view to making profits.”

Mr Hui emphasised that this is at variance with the policy intent of introducing demand-side management measures and goes against taking care of Hong Kong residents' needs in replacing their properties.

He added that with a view to ensuring the healthy development of the property market, the Government will monitor market conditions and take appropriate measures in response to market changes by making reference to a series of indicators.

Such indicators include property prices, home purchase affordability ratio, transaction volume and supply of properties, and local and global economic changes.