Stamp Duty Changes To Help First-time Buyers

Hong Kong's property market cooling measures are to remain in place, Financial Secretary Paul Chan announced on Wednesday, but stamp duty adjustments are being made to "ease the burden on ordinary families" buying their first homes.

Changes to the value bands for ad valorem stamp duty, which come into effect immediately, will save buyers tens of thousands of dollars.

The 3 percent duty rate which used to apply to flats valued at over HK$4 million and up to HK$6 million, now applies to units worth up to HK$9 million, for example.

A higher 3.75 percent rate, which used to kick in for flats worth more than HK$6 million and up to HK$20 million, now only applies to apartments worth more than HK$9 million.

As an example of the savings to be made, the government said someone buying a flat worth HK$6.5 million would now pay HK$185,000 in stamp duty, down from HK$230,000 before.

The changes are expected to benefit 37,000 buyers and cost the government around HK$1.9 billion each year, the financial secretary said.

Joseph Tsang, the chairman of real estate consultancy JLL Hong Kong, said the stamp duty adjustments won't help people much and will have little impact on the property market.

"Only the buyers who bought a flat below HK$10 million would be benefited from the proposed change of stamp duties for first-time buyers. However, they cannot save much. Currently many flats are selling for over HK$10 million, and therefore, the policy on the housing market of little effect," he said.