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Hong Kong Has No Plan to Cut Stamp Duty After Ip Floats Idea
(Bloomberg) -- Hong Kong said it had no plans to relax the stamp duty on home purchases, following comments from a top government adviser that it was among policies under consideration to shore up the economy.
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“Mainland professionals have been clamoring for the double stamp duty to be waived for them, even before they acquire the right of abode,” Regina Ip, convenor of the government’s advisory Executive Council, told Bloomberg Television on Tuesday. “It is all a raft of measures under consideration and this is certainly something that the government could consider.”
Ip’s comments triggered a rally in local developer shares. The stocks pared gains after the government said in a statement it didn’t plan to reduce property taxes.
“Regarding reports that the government is considering the relaxation of stamp duties for property, the government clarifies that there has not been discussion on the matter, and points out clearly that there are no relevant plans,” according to a statement.
Foreign buyers of residential property need to pay a 30% levy on all purchases under measures introduced in the past decade to cool home prices. Waiving the double stamp duty may reduce that to 15%.
Ip later issued a statement saying her comments on waiving stamp duty are based on a proposal made by her political party, which she would put forward during the upcoming consultation period for Chief Executive John Lee’s policy address, and she was not referring to any specific measure under consideration by the government.
She also said in the statement she was referring to “Buyer’s Stamp Duty,” an additional upfront tax on non-permanent resident buyers imposed by the government in 2012. Lee will deliver his policy address in October.
Home sales slumped about 57% by value in July from a year earlier, according to the city’s Land Registry. Rising interest rates and a worsening economy are projected to weigh on property prices in one of the world’s most expensive real estate markets. Goldman Sachs Group Inc. predicts home prices could fall 20% over the next four years.
Ip also acknowledged the benefit that would stem from ending hotel quarantine requirements by November, when a global banking summit and an international rugby tournament are planned.
“It’s a highly desirable goal - we all hope we could make it, but everything has to depend on a scientific approach based on the data, and we have to brace for other eventualities,” Ip said.
Hong Kong Quarantine Reduction Met With Calls to Go Further
Hong Kong is battling to regain its status as a global aviation and commerce center after years of strict Covid border controls isolated the former British colony and fueled an exodus of residents. The city’s economy is projected to shrink this year for the third time in four years.
The city’s leader on Monday reduced mandatory hotel quarantine for international travelers, slashing it to three nights from seven. While that move was welcomed by business groups and analysts, it was seen as insufficient given rival financial hubs have already opened their borders.
(Updates to add Ip statement from sixth paragraph.)
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