Housing prices have fallen for 9 consecutive months, and Hong Kong has enlarged its move: all residential property transactions are not subject to stamp duty

Edited by: Du Yu

According to CCTV News, on the morning of February 28, Paul Chan, Financial Secretary of the Hong Kong Special Administrative Region Government, delivered the budget of the Hong Kong Special Administrative Region Government for the 2024/2025 fiscal year in the conference hall of the Legislative Council Complex of the Hong Kong Special Administrative Region Government. The theme of the budget is: strengthen confidence, seize opportunities, and promote high-quality development. Mr Chan said Hong Kong's full-year real economic growth is forecast to be between 2.5% and 3.5%.

According to the official Weibo of the Voice of the Greater Bay Area on February 28, Hong Kong has launched a combination of measures to support citizens and enterprises. In addition, Mr Chan said that after careful consideration of the current overall situation, the HKSAR Government has decided to lift all residential property demand management measures with immediate effect, i.e. all residential property transactions will no longer be subject to SSD, BSD and New Residential Stamp Duty (SSD) from today.

Image source: Photo by reporter Zhang Jian (unrelated to the picture and text)

Hong Kong has launched a combination of measures to support people and businesses

According to the official Weibo of the Voice of the Greater Bay Area on February 28, Chen Mobo said that considering the economic pressure still faced by some industries and citizens, as well as the financial situation of the SAR government this year, the following measures will be introduced:

(1) To reduce rates for domestic properties in the first quarter of 2024/2025, subject to a ceiling of HK$1,000 per household. It is estimated that involving 3.08 million residential properties, the Government will lose HK$2.6 billion.

(2) Rates concession for non-domestic properties in the first quarter of 2024/2025, subject to a ceiling of HK$1,000 per household. It is estimated that 430,000 non-residential properties are involved. Government revenue will be reduced by HK$370 million;

(3) To reduce salaries tax and tax under personal assessment for the year of assessment 2023/2024 by 100 per cent, subject to a ceiling of HK$3,000, benefiting 2.06 million taxpayers in Hong Kong. The reduction will be reflected in the final tax payable for the year of assessment 2023/2024. Government revenue will be reduced by HK$5.1 billion;

(4) Reduce profits tax for the year of assessment 2023/2024 by 100 per cent, subject to a ceiling of HK$3,000, benefiting 160,000 enterprises in Hong Kong. The reduction will be reflected in the final tax payable for the year of assessment 2023/2024. Government revenue will be reduced by HK$430 million;

(5) Disbursement of the standard Comprehensive Social Security Assistance (CSSA) rate, Old Age Allowance, Old Age Living Allowance or Disability Allowance, and similar arrangements for the Working Family Allowance Scheme to eligible recipients of social security payments, involving additional expenses totalling about HK$3 billion.

Together with the first batch of 30, it is expected that a total of more than HK$40 billion of investment and about 13,000 jobs will be created in Hong Kong in the next few years, according to Mr Chan. The establishment of these enterprises in Hong Kong will drive upstream, midstream and downstream enterprises in the relevant industrial chains to Hong Kong, and promote the vigorous development of Hong Kong's innovation and technology ecosystem.

Mr Chan also said that in order to help SMEs cope with the cash flow problem, the application period of 80% and 90% of the guarantee products under the SME Financing Guarantee Scheme will be extended by two years, and the total credit guarantee commitment under the Scheme will be increased by an additional HK$10 billion.

The Hong Kong government said it would completely remove all demand-side management measures in the property market, including the abolition of buyer's stamp duty and special stamp duty

According to the official Weibo of the Voice of the Greater Bay Area on February 28, Chan Mo-po said that after careful consideration of the current overall situation, the SAR government has decided to withdraw all residential property demand management measures with immediate effect, that is, all residential property transactions will no longer be subject to special stamp duty, buyer's stamp duty and new residential stamp duty from today.

Hong Kong's private residential price index fell for nine consecutive months

On February 27, the Rating and Valuation Department of the Hong Kong SAR Government announced that in January 2024, the price index of private residential buildings in Hong Kong was 306.4 points, down about 1.57% month-on-month, declining for nine consecutive months, hitting the lowest point in more than seven years.

According to brokerage China, analysts believe that the reason for the further decline in Hong Kong property prices is due to the impact of sluggish market sentiment, high interest rates and home buyers waiting to see whether the property stamp duty will be reduced this week. In addition, January is often the off-season for the property market before the Spring Festival, and the number of property inspections and transaction volume is not high.

Chen Haichao, head of Ricacorp Real Estate Research, said that the main reason for the continuous decline in property prices in Hong Kong is that new properties are still competing for market share at low prices, which has put pressure on the bidding price of second-hand properties. In addition, Hong Kong stocks continued to bottom out during the period, which also affected the overall sentiment of the property market.

Chen Haichao believes that the adjustment of the Hong Kong stock market, coupled with the traditional light market of the Spring Festival, Hong Kong property prices are likely to continue to decline in February. The property market stimulus measures in the latest Budget will affect the property market trend.

Chen Yongjie, vice chairman of Centaline Property Asia Pacific, said that Hong Kong property prices are affected by interest rate hikes and economic downturn, and look forward to the introduction of stimulus measures in the new budget to allow developers to destock, and when the transaction volume returns to normal levels, property prices are expected to rebound.

Wayne Kwok, senior director of CBRE's valuation and advisory services department in Hong Kong, said that the property prices of some second-hand properties, especially in the neighborhoods near new properties, have fallen significantly, mainly because developers have launched new projects at attractive low prices, so second-hand property owners need to lower prices to facilitate transactions.

National Business Daily, comprehensive CCTV news, official Weibo of the Voice of the Greater Bay Area, and brokerage China

National Business Daily