Liberal Party Hits Out At Proposed Vacancy Tax

The Liberal Party has hit out at a government plan to tax developers who fail to sell new homes within a year of completion, warning the idea would push up property prices.

The pro-business party said just because these flats have an occupation permit, it doesn’t mean they are ready to be sold.

Howard Chao, the convenor of the party’s development and construction industry concern group, said taxing developers at 200 percent of the flat’s rateable value would be unreasonable, and developers may shift the cost onto buyers.

But the party has also suggested changes to the proposal if the government insists on pushing it through.

It said that since luxury homes are harder to sell than flats built for the mass market, they should be exempt from the tax. It also believes that it is unreasonable to threaten to jail company bosses who are found to have evaded the tax.

Chao said it would be unfair to punish managers for the mistakes or carelessness of frontline staff that could lead to properties going unsold.

The Chief Executive announced the initiative in June 2018, as part of plans to encourage developers to speed up the supply of new flats into the market, and discourage hoarding.

The administration said that at the end of March 2013, there were around 4,000 unsold units in completed projects, representing about 6 percent of the projected supply. This rose to around 9,000 units at the end of March 2018, or around 9 percent of the projected supply.

The government said it considers this undesirable, given the city's housing shortage.

The Legislative Council's panel on housing was to discuss the matter on Monday afternoon.