HONG KONG imposed additional taxes and raised down payments on residential properties, stepping up a battle against surging prices after the International Monetary Fund warned that asset inflation could derail the city s economy.
Homes sold within six months of purchase would incur a 15 percent stamp duty from Saturday, Finance Secretary John Tsang said in a briefing Friday. Down payments for homes costing HK$12 million (US$1.5 million) or more would rise to 50 percent, from 40 percent.
The measures show the government is serious about curbing speculation, and that would impact on market sentiment, leading to a fall in home sales volume, said David Ng, a Hong Kong-based property analyst at Royal Bank of Scotland Plc. Home prices won t see a decline immediately as speculators could still keep their stocks in the low interest rate environment.
Governments from South Korea to Brazil are acting to stem fund inflows into their higher-yielding markets after the U.S. Federal Reserve s expanded monetary stimulus. Hong Kong is resorting to increased taxes and tighter lending to curb home prices that have risen more than 50 percent since the beginning of 2009 because the city s currency peg to the dollar prevents its banking regulator from raising interest rates.
The unusual surge in flat prices has attracted speculators. This coupled with quantitative easing measures have distorted the market expectation regarding inflation and asset prices, Tsang said. The government is resolute in maintaining economic stability and curbing any threat to people s livelihoods.
Properties resold within six months to 12 months would incur a 10 percent stamp duty, while those resold from 12 months to 24 months would be charged 5 percent, Tsang said Friday. The stamp duty would be split between buyers and sellers, he said.
Down payments for homes costing between HK$8 million and HK$12 million would be increased to 40 percent from 30 percent, Hong Kong Monetary Authority Chief Executive Norman Chan said at a separate briefing Friday. (SD-Agencies)
