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HK Government Takes Action to Cool Down Property Market (Finally)!

The government has announced a new 15 percent property tax for all non-local buyers, and it will also increase an existing tax aimed at curbing short-term property speculation. This measurement is especially expected to discorage potential investors from Mainland China, who are responsible in most part for the acceleration in prices of the HK property market.

Anyone who doesn’t have permanent residency in Hong Kong will be required to pay the new Buyer’s Stamp Duty; while anyone who sells a property within three years of buying it, will be taxed up to 20 percent.

“The objective of the two new measures is to help alleviate the demand for housing by according priority, to meeting the needs of Hong Kong permanent residents under the exceptional circumstances of an overheated property market with supply shortage” Mr John Tsang said.

Mr Tsang said with abundant liquidity from the United States’ latest round of quantitative easing; and its pledge to keep ultra-low interest rates for another three years, the market now expects property prices to keep soaring. This, he said, is a serious threat to Hong Kong.

Two hours after his announcement, mainlanders and locals were seen dashing to the Tsim Sha Tsui sales office of The Reach estate in Yuen Long, looking to buy new homes in time to avoid the tax.

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Martin Gale