Govt Axes Plans For Vacant Property Tax

The government said on Monday that it is abandoning its proposed vacancy tax that had been aimed at deterring property developers from hoarding new flats, citing the ailing economy and a strong split in views.

The Transport and Housing Bureau said in a statement that it decided not to proceed further after taking into account the “latest economic situation”, along with the mixed views of legislators on the bills committee, and within the community at large.

The spokesman said while the new tax was aimed at encouraging a “more timely supply of first-hand private residential units”, it had concluded that the bill should now be withdrawn “after balancing various considerations”, without elaborating further.

However, the government said it’s possible that the initiative could be revived in future.

“The Government will continue to closely monitor the property market, and give due consideration in light of the upcoming economic situation and views in the community. We do not rule out the possibility of reintroducing the proposal in due course when necessary”, the spokesman said.

A member of the bills committee, Liberal Party leader Felix Chung, said this is the right call.

“The vacancy tax actually couldn't increase the supply of the property, because the developers are very actively trying to sell out their stocks in hand," the pro-government legislator told RTHK's Candice Wong.

On top of the vacancy tax proposal, the government is also withdrawing another bill that would have introduced premium taxis to Hong Kong.

The bureau noted that there have been concerns that the introduction of franchised taxis could “further aggravate the operating difficulties faced by the trade amid the economic downturn”.

And having considered the current economic situation, it believes it’s not an appropriate time to push ahead with this proposal as well.