Following Hong Kong, Macau has also begun to "withdraw from spicy".
On April 12, the Executive Council of the Macao Special Administrative Region held a press conference to say that it had completed the discussion on the policy plan to adjust the real estate demand management measures in Macao and the bill on tax measures therein, including the abolition of special stamp duty, special stamp duty and the acquisition of stamp duty, and the relevant bills will be sent to the Legislative Council for urgent processing.
The Spokesperson of the Executive Council and Secretary for Administration and Justice, Mr Cheung Wing-chun, said that at the end of last year, the Government moderately relaxed the measures to manage the demand for real estate in response to changes in the market environment, and the relevant proposal was deliberated and passed by the Legislative Council, and Law No. 1/2024 was enacted to amend Law No. 2/2018 (Stamp Duty on Acquisition of Immovable Property for Non-First Residential Purposes). From 1 January 2024, stamp duty of 5% of the purchase price will no longer be levied on persons acquiring a second residential immovable property.
At the same time, the relevant mortgage measures for buildings will be relaxed, including a maximum of 70% for residential property and 90% for economic housing by Macao residents, and there will be no longer different upper limits on the amount of LV.
Mr Cheung said that the Government has reviewed the situation and continued to pay close attention to and assess the situation in the real estate market, taking into account the relatively sufficient supply of various types of housing in recent years, and is now in a position to enact a bill on the abolition of tax measures related to the management of real estate demand, abolishing the Special Stamp Duty, the Special Stamp Duty and the Acquisition of Stamp Duty. At the same time, in terms of mortgages, the Monetary Authority of Macao will issue new guidelines to unify the maximum loan-to-value ratio (LTV) ratio for Macao residents and non-residents to 70% (the maximum loan-to-value ratio ratio for the purchase of economic housing will remain at 90%), and suspend the stress test requirement for a two-percentage point increase in mortgage interest rates.
In addition, the above measures do not preclude the Government from reintroducing the relevant real estate demand management measures in the light of the situation, including adopting other feasible means such as regulating public housing and land supply, so as to maintain the stability of the real estate market.
Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, also pointed out to Titanium Media APP that the full withdrawal of the three major transaction taxes of "obtaining stamp duty", "special stamp duty" and "special stamp duty" is conducive to greatly reducing transaction costs.
At the same time, Li Yujia also pointed out that the real estate regulation in Hong Kong and Macao is mainly based on taxation, financial leverage and interest rates, and the introduction of financial tax policies is simply only considered from the perspective of asset prices and financial risks, rather than considering some concerns about local finance, housing not speculation, investment growth, engineering projects and other mainland regulation and control. Therefore, when housing prices skyrocket, a contractionary policy is introduced, and all of them are out at once, and on the contrary, they all shrink.
"The purpose of this withdrawal is to grab talents and funds. In the future, the economy will bid farewell to high growth, and it will be a general trend for hot cities (including first-tier cities, Hong Kong, Macao, Singapore, etc.) to compete for talents and capital. Of course, if housing prices rise, spicy tricks will pick up. In addition, the Macau government has a large number of land plots, which can also hedge against the rising demand after the retreat. Li Yujia added.
It is understood that in order to maintain the steady development of the real estate market, since 2010, the Macao SAR Government has formulated and implemented a series of real estate demand management measures, including taxation and mortgages. Among them, tax measures include Special Stamp Duty, Special Stamp Duty and Stamp Duty on Acquisition.
However, as the property sector enters a downward cycle, the trend of Macau's property market is becoming more and more worrying. According to Macau's official data, in 2018, there were 10,585 residential transactions in Macau, in 2019, after the stamp duty came into effect, the transaction volume plummeted by 27% to 7,745, and in 2023, the transaction volume fell by 73% to 2,913.
In 2019, the average transaction price of residential properties in Macau fell from 109068 yuan per square metre to 87,195 yuan per square meter in January 2024.
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In the face of such a market environment, people in Macao's real estate industry have called on the government to "completely remove the real estate sting, open the door of Macao with an open and forward-looking thinking, welcome talents and money, and improve the happiness index of residents." ”
Titanium Media APP noticed that as early as a month ago (March 11), when the Hong Kong property market announced the "withdrawal of spicy", it attracted the attention of people in the real estate industry in Macau.
At that time, regarding the different property market policies in Hong Kong and Macao, Wang Shifa, Executive Vice President of the General Chamber of Real Estate Industry of Macau, pointed out that the "spicy move" was necessary when the demand for the property market was too strong and there was speculation, but at present, the Macao SAR government had a lot of measures to regulate, including the existing large number of economic and social housing, which could be met by increasing the supply if necessary. Second, the government holds a number of vacant land, which can increase supply at any time in the future and regulate the real estate market.
"So the cards in the government's hand are not only 'spicy' to play. Wang Shifa questioned whether it is still necessary to limit the demand for investment in the current weak property market in Macao, but it is also necessary to "withdraw the spicy move" without delay. (This article was first published on the Titanium Media APP, author: Chen Weina)