This undated photo shows a view of the Victoria Harbour in Hong Kong. The HKSAR government’s latest measure to adjust the decade-long stamp duty on home purchases will relieve the financial burden on first-time home buyers, but its impact on the housing market could be limited, according to experts. (PHOTO / IC)
The HKSAR government’s latest measure to adjust the decade-long stamp duty on home purchases will relieve the financial burden on first-time home buyers, but its impact on the housing market could be limited, according to experts.
Financial Secretary Chan Mo-po said in his 2023-24 Budget on Wednesday the stamp duty will be adjusted to make it easier for first-time home buyers to own a roof over their heads in one of the world’s most expensive cities.
Last year, more than 90 percent of those who bought residential properties were first-time buyers.
Chan Mo-po,
Financial Secretary of Hong Kong Special Administrative Region
“Last year, more than 90 percent of those who bought residential properties were first-time buyers,” he said.
“Having considered that no adjustments have been made to the value bands of the ad valorem stamp duty payable for the sale and purchase or transfer of residential and non-residential properties since 2010, I have decided to make adjustments in this regard, with a view to easing the burden on ordinary families in purchasing their first residential properties, particularly small and medium-sized residential units,” said Chan. The move is expected to benefit 37,000 buyers and cost the government about HK$1.9 billion per year, Chan said.
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Jason Leung Yeuk-ho, a researcher in land and housing at Hong Kong think tank Our Hong Kong Foundation, said the ad valorem stamp duty is not a major cost component, compared to the overall costs of purchasing a flat.
“Nevertheless, the adjustments will be welcomed by aspiring homeowners, but it will not significantly affect their purchases. Hence, the impact on the market is likely to be limited.”
Ho Lok-sang, director of the Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute, Lingnan University, said the government’s move is “certainly welcomed”.
“However, first-time home buyers would benefit more if the Special Stamp Duty were repealed, which would boost second-hand supply or starter homes,” he said.
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Hong Kong’s property market saw a downturn in the past year amid the weak economy and the COVID-19 pandemic.
According to official statistics, the city’s home prices dropped 15.6 percent year-on-year in 2022 -- the biggest decline in 24 years.
