No More Stamp Duty: For The Public Or The Affluent?

By Brendan Lai

March 13th 2024

The 2024-25 budget speech by financial secretary Paul Chan announced on February 28th a series of measures targeted at the Hong Kong housing market.

Chan proposed to abolish stamp duties with immediate effect— that is including Special Stamp Duty (SSD), Buyer’s Stamp Duty (BSD) and New Residential Stamp Duty (NRSD). Stamp duties in Hong Kong are taxes paid to the government by anyone taking part in a property transaction. 

The government has been implementing increased stamp duties on real estate since 2010 as ‘cooling measures’ to control housing prices that were being driven by non-residents and investors. 

“We have been keeping a close watch on the residential property market.” Said Chan, “With immediate effect, no SSD, BSD or NRSD needs to be paid for any residential property transactions starting from today.” He said in the Budget speech. 

A stamp duty suspension mechanism was introduced to incoming talents purchasing residential properties in Hong Kong in the October 2023 Policy Address. “This arrangement has been well-received, with over 500 applications approved.” Said Chan, “This is a testament to the appeal of Hong Kong for overseas talents.” He said. 

“I believe that Hong Kong is still the international finance hub of the world and still creating jobs.” Said Mr. Soo, a 21 year-old law intern who came back to Hong Kong from Sydney

The previous measures— aimed to cool Hong Kong’s red-hot residential housing situation were deemed no longer relevant amidst the current economic and market condition. 

Opinions on these measures were mixed on public forums, with some arguing that the abolishment only appeals to some.

“Scrapping the cooling off measures in the property market only helps the rich people, not the majority of Hong Kongers. Well done Hong Kong government.” Said Jade Wong on an online forum.

While others see this as an opportunity for citizens to become homeowners.

“I think that it’s meant to make it more attractive for people to buy [residential property] now.” Said Soo. “I think that if it’s not a huge stress to buy, it’s not a bad time to be a buyer.” He said.

“Well I think we’ll see a surge in property sales.” Said Mrs. Lau, “I would too but I can’t afford property in Hong Kong yet.” She said.

Moreover, the decision to lift controls was pushed by factors like a nine-month consecutive decline by January, leading to home prices rereading to levels last seen in 2016.

The sentiment for the residential property market has become very cautious since the middle of 2023 amid rising interest rates and uncertainty in the external environment. According to Paul Chan flat prices fell seven per-cent during the year, with the number of transactions declining by five per-cent. 

While public opinions are mixed, the Stamp Duty bill is set to be introduced into the Legislative Council to enable property purchasers to benefit from the measures as soon as possible.

Feature Photo: Photo Gallery of the 2024 Budget Speech (HKSAR Government Website)