The Government imposes Special Stamp Duty to curb speculation in Hong Kong residential properties
A Hong Kong Government spokesman announced on 19 November 2010 that the Government would introduce a Special Stamp Duty (SSD) on Hong Kong residential properties to curb speculation.
The Government will amend the Stamp Duty Ordinance (the Ordinance) by introducing, on top of the current ad valorem property transaction stamp duty, an SSD on residential properties of all values at the point of resale if the properties are acquired on or after 20 November 2010 and resold within 2 years after acquisition.
The SSD will have three levels of regressive rates for different periods of holding-
- 15% if the property has been held for 6 months or less;
- 10% if the property has been held for more than 6 months but for 12 months or less; and
- 5% if the property has been held for more than 12 months but for 24 months or less.
To stop non-compliance, the existing penalties under the Ordinance will be extended to cover the SSD. Any person who fails to pay the SSD by the deadline for payment shall be liable to penalties up to 10 times the amount of the SSD payable. The evasion of SSD by fraudulent practise shall be a criminal offence, as with the evasion of normal stamp duty under the existing Ordinance.
Moreover, further to the disallowance of deferred payment of stamp duty for all residential property transactions valued at more than $20 million with effect from 1 April 2010, deferred payment of the current ad valorem property transaction stamp duty for all residential property transactions valued at $20 million or below will not be allowed. The stamp duty has to be paid within 30 days after the signing of the Agreement for Sale and Purchase.
The Government expects that these measures will send a clear signal to anyone minded to make quick profits through speculating in the Hong Kong property market.
