Slap Vacancy Tax On Second-hand Homes: Lawmaker

Democratic Party lawmaker Andrew Wan has called on the government to include the second-hand market in a planned vacancy tax, saying limiting it to only newly-built apartments is not going to be effective.

Wan said under the plan, new private residential units left vacant for more than a year will be subject to the tax that will be set at twice a home’s rateable value, or twice its estimated annual rental value.

But the lawmaker said this proposal won't be effective in solving Hong Kong's housing shortage problem. "I think it is a paper tiger. It is rather a gesture than a really effective measure to control the property market," he said.

He said there are only 9,000 newly-built empty flats at present. The developers can slow down the process after 90 percent of the building construction is done to control the number of empty flats, he said.

Wan said builders can avoid the vacancy tax by showing that they have rented the units out to other related companies or employees. That's why the second-hand market should also be covered by the law, he told RTHK's Janice Wong.

Meanwhile the founder of the Centaline Property agency, Shih Wing-ching, also said that the new rules won't help to solve Hong Kong's housing shortage.

Shih said it won't help increase the property supply as this depends on the amount of land available. "It can force some developers to sell their property, especially those which have occupation permits in order to avoid the vacancy tax," he said.

But he said it may also prompt some developers to delay their construction projects and that may reduce housing supply.