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Following is a question by the Hon Abraham Shek and a written reply by the Secretary for Transport and Housing, Ms Eva Cheng, in the Legislative Council today (February 29):
Question:
On November 19, 2010, the Financial Secretary announced that he would introduce, amongst other measures, a Special Stamp Duty (SSD) on residential properties at the point of resale in order to curb short-term speculative activities that threatened our economic and financial stability, reduce the risk of asset bubbles forming and ensure the healthy development of the property market. He described such initiatives as extraordinary measures under exceptional circumstances. In this connection, will the Government inform this Council:
(a) of the total number of residential property transactions subject to the payment of SSD since its implementation, and the total amount of SSD so collected;
(b) out of the transactions in (a), of the number of those which were loss-making to vendors (i.e. where the price realised from the sale of the property was lower than its original purchase price);
(c) whether the Government has granted exemption from SSD to any residential property transaction so far; if so, of the total number of such exemptions and under what circumstances they were granted; and
(d) whether the Government has considered if the policy objectives of SSD, namely curbing short-term speculative activities and reducing the risk of asset bubbles forming, have been fulfilled?
Reply:
President,
The Government has been monitoring developments in the private residential property market closely and remains vigilant on the risks of a property bubble. Since 2010, the Government has been responding to the situation through the introduction of long, medium and short-term measures in four areas, including increasing land supply, combating speculative activities, enhancing the transparency of property transactions, and preventing excessive expansion in mortgage lending, with a view to ensuring the healthy and stable development of the property market. The Special Stamp Duty (SSD), which is part of the aforementioned package of measures, aims to combat short-term speculative activities involving residential properties.
My reply to the various parts of the question is as follows:
(a) and (b) SSD applies to residential properties acquired on or after November 20, 2010 and disposed of within 24 months after acquisition. Since the implementation of SSD on November 20, 2010 and up to end January 2012, 98 transactions were charged with SSD involving a total SSD amount of about $29.6 million. Of the 98 transactions charged with SSD, 10 cases had their disposal prices lower than their acquisition prices.
(c) Since the implementation of SSD on November 20, 2010 and up to end January 2012, the Stamp Office of the Inland Revenue Department had approved a total of 200 exemption cases in accordance with the relevant provisions of the Stamp Duty Ordinance (Cap. 117). These exemption cases involved, for example, nomination, sale or transfer between close relatives; sale or transfer of the residential property by the vendor whose property was inherited from a deceased person's estate; and sale of residential property where the property was transferred to or vested in the vendor by or pursuant to a decree or order of a court.
(d) SSD has been effective in curbing short-term speculative activities. Statistics show that on average there were 80 subsale cases (i.e. confirmor cases) per month during the period from December 2010 to January 2012, representing a drop of about 75% as compared to the monthly average before the introduction of SSD (there were on average about 320 subsale cases per month in the first eleven months in 2010). We have no plan to review SSD at this stage.
Ends/Wednesday, February 29, 2012
Issued at HKT 11:33
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