The Hong Kong government has bowed to pressure from the real estate sector and homeowners, announcing the removal of all restrictions on property transactions in a bid to boost the city’s economy.
Hong Kong’s financial secretary, Paul Chan, announced the news as part of his budget presentation at the Legislative Council today, according to multiple media reports.
The measures to be scrapped have been in place for a decade and include onerous stamp duties targeting second-home buyers and buyers who are not permanent residents of Hong Kong. A punitive impost that deterred people from selling their properties within two years of purchase will also be done away with.
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“We consider that the relevant measures are no longer necessary amid the current economic and market conditions” Chan told lawmakers.
Shortly after the news, Hong Kong’s Monetary Authority announced that it would immediately ease requirements for property loans. For buyer-occupied homes valued at up to HK$30 million, the maximum loan-to value ratio will be raised to 70 percent from 60 percent. The value will be lifted to 60 percent from 50 percent for homes of higher value and for purchases of residential properties that are not owner-occupied.
The market has reacted favourably to the news. Ricky Wong, managing director of Wheelock Properties told the South China Morning Post that the move “will directly reduce the tax burden on buyers and help drive increased home demand.”
