Developer Says Any Vacancy Tax Should Be Universal

Developers have stepped up their opposition to a possible vacancy tax on unsold units - while insisting it should be applied fairly if implemented. That would mean taxing vacant flats in both the primary and secondary markets.

"If the government truly believes that vacancy is a problem, then all the vacant units should actually be under the same tax regime," said Donald Choi, the chief executive of property developer Chinachem.

Choi, who was speaking after appearing on RTHK's "City Forum", also warned homebuyers any tax on unsold flats may be passed on through higher prices.

The government is expected to announce details of a new tax on vacant primary market flats this week as officials scramble to address the city's housing shortage. Government figures suggest developers hold about 9,000 completed flats.

The founder of Centaline property agency Shih Wing-ching also warned the government that imposing a vacancy tax on unsold flats may backfire. He said developers will just change the way they bring flats to market.

"It will slow down the process of their construction and they will just follow what the lease conditions require," he said.

Shih said developers were bringing flats to the market faster than the requirement under the lease conditions, so it made little sense to punish them. And he added that the vacancy tax proposal is nothing more than a public relations campaign to please populists.

Speaking on the same programme, accountancy sector lawmaker Kenneth Leung said he supported the levy, even though it may not lead to lower home prices. Leung said it was better than doing nothing.