Hong Kong Chief Executive John Lee announced that the government will ease several property restrictions, which will come into effect from October 25, 2023. Authorities will waive a 10% levy on properties sold within two years of purchase, and reduce the stamp duty that non-permanent residents and residents have to pay on their properties from 15% to 7%.
The city’s leader unveiled these measures at this second policy address on Wednesday to combat rising interest rates and a decline in local property transactions over the past year. Lee said authorities will “shorten the applicable period of the Special Stamp Duty [of 10%] from three years to two years,” and “reduce the respective rates of the Buyer’s Stamp Duty and the New Residential Stamp Duty by half, from 15% to 7.5%.”
In addition, the government will suspend the stamp duties — the previously mentioned Buyer’s Stamp Duty and the New Residential Stamp Duty — that eligible overseas talent had to pay on property purchases. Under the previous arrangement, these buyers would have to pay these levies and would get a refund when they become permanent residents of the SAR. However, under the new measures, they will only have to pay these duties if they fail to become permanent residents.
Hong Kong home prices are predicted to fall by as much as 5% by the end of 2023, after seven of the territory’s major lenders increased mortgage rates in September. And while Hong Kong is still one of the world’s most pricey real estate markets, property prices have fallen over the past few years, with the 2023 Asia Pacific Home Attainability Index stating that the city’s private housing market has reverted to 2017 levels because of “a significant increase in mortgage interest rates in line with the US interest rate increase, a net outflow of population, and a less optimistic view on the local property market.”
Header image credits: Leung Cho Pan via Canva
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