Wednesday, November 25, 2015   

Flat 'hoard tax' blasted

Eddie Luk

Monday, January 21, 2013

A new property tax on vacant apartments may be slapped on developers who stockpile flats to manipulate housing prices, the chief executive warned.

Leung Chun-ying said hoarding units would defeat the government's purpose of selling land to private developers to increase supply.

At present, there are reportedly more than 4,000 flats completed in the past two years that remain unsold and off the market.

Reports also say about 1,000 new flats at Hang Lung Properties' Long Beach residential project in Tai Kok Tsui have not been sold since completion in 2006.

"We have been concerned whether there are any newly built residential flats being deliberately held back from the market for the purpose of keeping prices at a high level," Leung said on a radio program yesterday.

"If there are flats being withheld from the housing market and that affects how citizens' housing needs are addressed, it will violate the government's intention of selling land [to developers for building new units]."

But Stewart Leung Chi-kin, chairman of the Real Estate Developers Association, said if the government implements a vacancy tax, it will push developers to sell their flats, and such a move will infringe on the principle of a free- market economy.

At the City Forum, a member of the Long Term Housing Strategy Steering Committee, Andy Kwan Cheuk-chiu, also expressed concerns, saying it may dampen developers' interest in applying for land.

Leung said the government can't "sit back and
do nothing" if the practice is happening.

His comments came after Executive Council member Barry Cheung Chun-yuen suggested at the weekend that the government could consider introducing the vacancy tax.

Leung said housing should not be simply seen as a commercial product as it can affect citizens' livelihoods and land sale to developers is not merely a commercial act.

Meanwhile, Financial Secretary John Tsang Chun-wah said he believes developers need to consider their capital flow when selling flats in the market.

"If the property market heats up again, I will launch other measures without hesitation so that it will have stable and healthy development," he said on his blog.

Exco convener Lam Woon-kwong said it is appropriate to consider the new vacancy tax but he sees no urgency to launch it. Secretary for Transport and Housing Anthony Cheung Bing-leung said the current 4 percent vacancy rate of existing private housing is not high, but he would like to see it cut to 3 percent. He added the vacancy rate of Home Ownership Scheme flats is only slightly higher than 1 percent.

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