Financial Secretary of Hong Kong Paul Chan announced the immediate cancellation of all extra stamp duty measures for residential properties, known as “spicy” measures, included the Special Stamp Duty (SSD), Buyer’s Stamp Duty (BSD), and New Residential Stamp Duty (NRSD), concluding 13 years of “spicy” measures history.
“We consider that the relevant measures are no longer necessary amidst the current economic and market conditions.” 1orginal speech given in Cantonese, quote from English transcript.Chan said.
The ‘Spicy’ measures were reduced four months earlier, on Oct. 25. The applicable period of the SSD was shortened from three years to two years, and the BSD and NRSD were halved. A stamp duty suspension arrangement was also introduced. However, that didn’t stop the continuous drop in residential property prices.
According to the data from Rating and Valuation Department, the price index has recorded a continuous drop for nine months since May 2023. This includes a 5% drop since October 2023, when the first reduction in the ‘Spicy’ measures was implemented. The current (last month) price index for private residential properties stands at 306.4, marking a 23% drop from the record high in September 2021.
Besides price, the number of transactions also dropped by five percent to a low level of about 43,000. Chan summarized that this is because”market sentiment has become very cautious since the middle of last year amid rising interest rates and an external environment fraught with uncertainties.”2orginal speech given in Cantonese, quote from English transcript.
feature photo: FS of Hong Kong Paul Chan delivered budget for 2024 in LegCo. Photo by LegCo Youtube