High time hoarding tax fear hits home

Editorial | Mary Ma 11 Jun 2018

So, it will be known very soon how the government will tax property developers for hoarding finished flats.

Developers are bound to cry foul. But in view of the ridiculously expensive housing prices these days, I strongly doubt whether they will win any sympathy from a public already incensed over having to tolerate extremely small living spaces at soaring costs.

On the contrary, I'm sure people would like to see an early implementation of the hoarding tax.

By now, it's clear the new tax will target the primary sector only, as developers are increasingly reluctant to sell their units quickly after completion - expecting the flats to fetch even more mouth-watering profits later.

That's a typical merchant's mindset, and they shouldn't be blamed for practicing what the market does. However, it's a problem when hoarding has become a new normal. So it's only a matter of time before authorities have to deal with the norm of such great concern.

To some extent, the administration has been slow in reacting to that.

It was reported the new tax will be based on the rateable value of the vacant units, and multiplied by a factor which can exceed the rates generally charged today. The unprecedented tax would apply to all small and large units left vacant after a certain period in the primary sector. Properties in the secondary sector are unaffected.

As policymakers enact the hoarding tax, it will be essential to remove loopholes that clever marketeers can exploit to circumvent via, say, bogus transactions.

Chief Executive Carrie Lam Cheng Yuet-ngor recently said she has enjoyed her role as the top public administrator so much that "a month feels like a day." If that's really the case, congratulations to her, since it's now extremely rare to see someone with everything going like a breeze.

For many whose living space is the size of a cubicle, a month feels like a year.

If a month feels like a day, Lam's "12th day" as chief executive has just started. Unfortunately for some, it feels like the 12th year.

Something has to be done about the exorbitant housing costs that even Lam has conceded are totally out of reach for the general public. If the crisis is allowed to persist, any faint hopes of home ownership will evaporate among youngsters more quickly than feared.

At this important juncture of her first anniversary in office, there has been little progress in the area of housing. Promises of more supply are being undermined by developers' marketing tactics. At the end of the first quarter, the number of vacant finished units was about 9,000 - of which 2,000 were built between 2011 and 2015.

The Real Estate Developers Association claimed the government had overblown the figures. But could the government do that when statistics are over there in black and white?

With the promised "big debate" on land supply fast becoming a "big disarray," it's urgent for Lam to include the hoarding tax in her first yearly report card.

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