Hong Kong Chief Executive John Lee delivers his annual policy address to the Legislative Council on October 25, 2023.
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Hong Kong will slash buyers’ stamp duty for property buyers, and suspend all stamp duties for newly arrived foreign talent in a slew of measures aimed at bolstering its sluggish real estate sector.
This is the first time these cooling measures — in a variety of various stamp duties known as “spicy policies” — will be relaxed effective Wednesday. They were first introduced in 2010 to curb red-hot property prices in a low interest rate environment.
“Over the past year, interest rates have risen significantly, various economies have shown moderated growth, and transactions of the local residential property market have declined alongside a downward adjustment of property prices,” Hong Kong Chief Executive John Lee said in his annual policy address on Wednesday.
Hong Kong’s lukewarm post-Covid economic recovery has been accompanied by sluggish residential transactional volumes in the territory’s once notoriously hot property sector.
Home prices in Hong Kong declined four months in a row. The official housing price index stood at 339.2 in August, down 7.9% from a year earlier and 4.2% lower from April peaks.
Among levies relaxed: the stamp duty that non-permanent residents have to pay for property and another levy imposed on additional properties purchases by residents will each be halved to 7.5 per cent.
Lee also announced a special stamp duty that was previously imposed on transactions involving property held for less than three years will now only apply to transactions for property held for less than two years. This levy amounts to 10% of the property price.
The suspension of all stamp duties on property purchases for new foreign talent will subject to these new residents obtaining permanent residency.
— CNBC’s Vivian Kam contributed to this story.
This is a developing story. Please check back for updates.