Developer slams vacancy tax

Business | Gary Poon 12 Mar 2019

Once the long-awaited vacant property tax is launched, developers would be prohibited from trying to avoid paying the tax by conducting non-arms length transactions such as renting or selling homes to their subsidiaries.

However, Ng Shung Mo, head of sales at Chinachem Group, complained the proposed policy is not reasonable, explaining that luxury property projects are difficult to sell out within a short time.

Meanwhile, lawmaker Andrew Wan Siu-kin said the policy would not be effective if the government just levied the tax on primary properties, and added the tax may not be applicable if the developer doesn't apply for an occupation permit when the building is completed.

The vacant property tax would also not be collectible by the government if the new units are rented out for more than half a year, according to market rumors. Some developers may also decide to turn their projects into rental units rather than selling them, such as at Sun Hung Kai Properties' (0016) Victoria Harbour development.

In other news, CK Asset (1113) relaunched the four forfeited units of Ocean Pride in Tsuen Wan by the way of lucky draw, which lured more than 110 potential purhasers.

Separately, special duty transactions plunged 41.5 percent from January to 1,234 cases in February, with total duties reaching HK$953.6 million, down 55 percent from January.

In Yuen Long, the secondary home market seemed to recover as 77 transactions have been recorded so far this month, compared to only seven deals in the first 10 days of February, and 91 transactions for the whole month.

At The Center office tower in Central, Asia Property Agency has reduced asking prices for four units it is attempting to sell by about 15 percent from HK$41,500 per square foot to between HK$34,950 and HK$35,360 per sq ft, according to agency chairman Tsai Chih-chung. The listed units ranged from 1,810 to 2,852 sq ft.

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