(Edits first paragraph)
HONG KONG, April 11 (Reuters) - The Hong Kong government
said on Tuesday first-time home buyers purchasing more then one
flat at the same time would be subject to a 15 percent stamp
duty, the latest bid to cool property prices in one of the
world's most expensive real estate markets.
Home prices in Hong Kong have jumped 364 percent since 2003,
while the median monthly household income has risen just 61
percent, pushing home ownership out of reach for many.
Hong Kong last introduced property cooling measures in
November 2016, raising stamp duty on property transactions for
the first time in three years but the measures had little
"We should suppress three types of demand: speculative,
external, meaning buyers from outside Hong Kong, and also
investment demand," Hong Kong leader Leung Chun-ying told
"The new proposal, which will take effect after midnight
tonight, is to ensure that people do not buy more than one unit
by using one legal document."
Leung said some buyers had been using one legal document to
buy multiple flats to skirt stamp duty on second homes, pushing
up prices across the board.
"If buyers use one legal document to buy more than one
residential flat, the relevant transaction will be taxed at 15
percent," he said.
Leung, who steps down in July after a five-year term, took
power in 2012 with a pledge to make housing more affordable, but
since then prices have hit fresh record highs.
He emphasized the government's efforts in raising housing
supply, while financial secretary Paul Chan said he expects the
potential supply of new flats in Hong Kong over the next three
to four years to exceed the December estimate of 94,000 units,
hitting a new high.
Beijing-backed incoming leader Carrie Lam has pledged to
tackle the city's housing problem, which is also a top concern
of many foreigners working in Hong Kong.
Lam's goal to cool the property market will be challenged by
the recent influx of Chinese capital snapping up some of the
city's best plots of lands at record-breaking prices.
Thomas Lam, senior director at property consultancy Knight
Frank, said the new measure would not have a big impact on
developers, but would give the average buyer more opportunities
to buy a flat.
"This measure does not have a big impact on the market, but
the government is sending a message to the market and to the
developers, telling them they do not encourage this (multiple)
transaction method," he said.
The relentless rise in home prices had prompted renewed
speculation that the government may impose more property
tightening measures such as curbs on multiple property purchases
at one time in order to puncture the trend.
The Chinese-ruled city has seen a sharp rise in the number
of first-time buyers purchasing multiple properties in one go to
avoid paying a levy, though these cases only take up 4.7 percent
of all transactions, Leung said.
Soaring property prices are in stark contrast to the
slowdown in the former British colony's overall economy, as
evident from flagging retail sales and sluggish economic growth.
(Additional reporting by Michelle Price; Writing by Anne Marie
Roantree; Editing by Nick Macfie)