|Stamp duty increased to curb surging home prices
The government has announced further curbs on property market just five days before unveiling the new fiscal budget.
Regular stamp duty will be vastly increased, said Financial Secretary John Tsang Chun-wah, effective starting tomorrow (February 23).
For home priced under HK$2 million, stamp duty will be 1.5 percent of the transaction value, as compared to the recent charge of HK$100. For all other prices, rates of stamp duty will be doubled, bringing the high level to 8.5 percent from currently 4.25 percent.
Home buyers who currently do not have any property will only have to pay the existing tax related to the transaction.
For transactions of non-residential properties, stamp duties will be charged once the agreements are signed, in line with the practice in residential homes.
The measures of Buyer's Stamp Duty (BSD) and enhanced Special Stamp Duty (SSD) launched last October were effective for some time, before the uptrend of home prices resumed recently, said Tsang.
Along with the increasing liquidity, the risk of property bubble is escaluting, said Tsang, noting that the affordablity of home owners is constantly falling, as supply does not follow demand in the housing market. An increase of interest rates of 3 percentage points will boost the proportion of mortgage expenses from 52 percent to 68 percent.
Home prices have gone up by 120 percent from the level marked in 2008, Tsang said.
Tsang vowed to implement more measures necessary to contain housing market.
Hong Kong Monetary Authority chief Norman Chan Tak-lam will meet with reporters to explain details of the measures from the banking prospective. later today.