Friday, February 21, 2014, 07:58
Carrie Lam urges LegCo to pass stamp duty bill
By Kahon Chan in Hong Kong

Chief Secretary for Administration Carrie Lam Cheng Yuet-ngor urged the Legislative Council (LegCo) on Thursday to pass the stamp duty bill to ensure Hong Kong’s property market does not face any future uncertainty.

The stamp duty bill was passed during its second reading on Thursday, but as the third reading is likely to take place on Friday or Saturday, uncertainty still lingers about the final vote — largely due to indecision by the opposition camp.

Pro-business Liberal Party, independent Paul Tse Wai-chun and real estate sector representative Abraham Razack are poised to block the bill, but their pro-establishment allies have shown a commitment to it.

Carrie Lam, speaking on the sidelines of a meeting on Thursday, said the government’s stance is clear. She said the community has shown enormous support for government efforts to cool the property market.

“It is time to pass (the bill) or else the property market in Hong Kong will face instability,” said Lam. “I urge the legislators, who are deliberating on the bill in the LegCo, to listen to the people and pass the bill as soon as possible.”

The new Buyers’ Stamp Duty (BSD) and increased rate of Special Stamp Duty, aims to raise costs for investors and curb speculation. It first took effect on Oct 27, 2012 under a retroactive clause. A LegCo committee then spent a year examining a draft law.

One of the biggest disputes focused on an adjustment mechanism for the BSD. The government insisted on writing a “negative vetting” procedure into law. But the opposition camp warned this will cripple the legislature’s power.

Secretary for Transport and Housing Anthony Cheung Bing-leung formally offered this long-anticipated commitment on Thursday. In the case of a rise in the duty rate, the government will drop the “negative vetting” approach, but table a bill to LegCo, he said.

Martin Liao Cheung-kong, a representative of the Chinese General Chamber of Commerce, attempted to reach a compromise. He proposed that while the new rate will come into effect once the bill is gazetted, the government may refund the differences if the bill fails to pass in LegCo.

Liao’s amendment had the backing of the opposition camp and the Liberal Party. But it was three votes short of winning majority support from colleagues in functional seats. Some 21 lawmakers, out of 60 in attendance, abstained from voting.

Ip Kwok-him of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) said Liao’s proposal merited further consideration. But he also abstained.

Other amendments tabled by legislators were all voted down during the committee stage, including proposed exemptions for registered charitable organizations or companies with directors who are local permanent residents.


DAB’s Starry Lee Wai-king said she was convinced the proposal to exempt “local” companies was not vulnerable to abuse. But Lee said she was concerned about sending the wrong signals to the market. The government also said foreign companies may find such distinctions unfair.

The only key amendment approved on Thursday was proposed by lawmakers, but was later tabled by the government. Exemptions for permanent residents aged under 18 will be lifted to avoid abuses by their guardians, who might not be locals.