Hong Kong to reduce property tax for low-end home transactions

THE Hong Kong government will lower the stamp duty for some cheap homes in its latest attempt to boost the lacklustre property market.

Residential units valued at HK$4 million (S$688,292) or below will be subject to the minimum stamp duty bracket at HK$100, the city’s finance chief Paul Chan announced in his budget speech on Wednesday (Feb 26). Previously, transactions above HK$3 million but under HK$4 million were charged a levy of as much as 1.5 per cent of the deal value. 

The move, affecting only the low-end segment of the market, follows last year’s removal of all property curbs. Hong Kong’s real estate industry has been suffering from a prolonged downturn for more than three years due to expensive borrowing costs, a weak economy and oversupply of homes. Home values have declined by 27 per cent since their peak in 2021 and are nearing the lowest levels since 2016 in recent months. 

The government, heavily reliant on property income, has tried to lift the market in the past without much effect. Even as the government scrapped all extra stamp duties and relaxed mortgage rules last year, prices dropped almost 5 per cent in the past year. The change, effective immediately, will benefit 15 per cent of total transactions, the government estimates. BLOOMBERG