Economy

HK launches special stamp duty to curb house speculation

(Xinhua)
Updated: 2010-11-20 19:42

HONG KONG - The newly issued special stamp duty will help curb short-term property speculation since it will increase speculators' transaction costs, Secretary for Transport and Housing of the Hong Kong government Eva Cheng said on Saturday.

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To clamp down on property speculation which helped heating up the property market, the government of Hong Kong Special Administrative Region issued a new round of measures on Friday, including launching a special stamp duty on residential properties on top of the current property transaction stamp duty.

The newly announced anti-property speculation measures were appropriate and timely, said Cheng while attending a radio talk show.

According to new regulations, residential properties bought from November 20, and resold within 24 months will be subject to the proposed special stamp duty paid by the buyer and seller, which will be up to 15 percent if the transaction takes place within six months.

"Buyers and sellers should discuss the arrangements of paying the special stamp duty among themselves," Cheng said, adding that the lawyers and estate agents involved in the transaction should remind their clients of the new changes and requirements.

Cheng said she hoped that the new initiatives will ensure the property market's stable and healthy development, benefiting real homebuyers. Meanwhile, she reminded potential homebuyers to assess their affordability carefully before making decisions. ?

As part of the plan, the Hong Kong Monetary Authority (HKMA) also announced on Friday that maximum loan-to-value (LTV) ratio for residential properties with a worth of more than 8 million HK dollars ($1.03 million) will be lowered, in a bid to strengthen risk management in residential mortgage lending business.

In the first nine months of this year, Hong Kong's house prices have moved up about 15 percent, with luxury flat prices surpassing their peak level in 1997 by 10 percent and prices of small-sized units increasing by 8.1 percent in the past six months.