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2023-24 Budget: Government lowers decade-old ad valorem stamp duty for ordinary first-home buyers

  • By: Yuhe WANGEdited by: Bella Ding、Jiaxing Li、Rex Cheuk
  • 2023-02-23

The Hong Kong government announced the adjustment in the value band of ad valorem stamp duty to relieve the burden on ordinary families to purchase residential houses. Under the updated tax band, the threshold for the HK$100 stamp duty will increase from HK$2 million to HK$3 million while the stamp duty for houses worth between HK$6.6 million and HK$9 million will decrease from 3.75% to 3%. Only first-time ordinary buyers could be benefited. “It is anticipated that this measure will benefit 37,000 buyers,” said Paul Chan Mo-po, the Financial Secretary of Hong Kong.  Chong Tai-leung, an economics professor at the Chinese University of Hong Kong, said that the new policy would improve the environment of the property market in 2023.  The government announced the detainment of 12 residential sites for the 2023/24 land sale programme, providing more purchasing opportunities. However, Chong said the hundred-dollar stamp duty is only for units under HK$3 million, while the stamp duty rate for flats over HK$10 million remains unchanged.  “The policy may only stimulate the property market under HK$3 million, which are usually the nano flats and remote village houses,” said Chong.  Starter Homes Pilot Scheme for Hong Kong Residents, included in the 2020-2021 Budget, intends to relieve the house-purchasing burden of ordinary families, mainly by providing low-price flats. Kenneth Chiu Hung-wan, the regional sales director of Centaline Property Agency Limited said the demand for starter homes will show gradual growth this year under the adjusted stamp duty policy.  Chiu expects the local property market will rebound by 5% to 10% this year after the city’s finance Chief announced a 15% decline in flat prices last year. The current demand-side management measures for residential properties, curbing external demand and reducing investment demand, remain unchanged.  The Hong Kong Authorities announced the full border reopening starting …


Housing pressure forces Hongkongers to leave

Wong Chun-yip moved to London from Hong Kong with his wife in 2019. They have just bought a house in the city. In Hong Kong, where housing prices are among the highest in the world, owning an apartment was something the 37-year-old could hardly imagine. "I am a freelance writer with a very unstable income. It was too much of a struggle to rent a flat and support my family on a basic salary of $37.5 per hour in Hong Kong. The high property prices gave me no hope," Wong said. Hong Kong ranked the least affordable housing market for the 12th consecutive year in 2022. Hongkongers can expect to work up to 23 years before they can buy their first home, according to Demographia’s International Housing Affordability report. High housing prices were one of the reasons that drove Wong to leave. He said it was a difficult decision because his family and friends are in Hong Kong, but he had no better option. Data from the Hong Kong General Chamber of Commerce showed that 27% of Hong Kong people moved to foreign cities for a better quality of life in 2005. “It is much easier to buy an apartment in the UK than in Hong Kong,” Wong said.  According to the latest data from Numbeo, a global statistical database, it is twice as expensive to buy an apartment in Hong Kong as it is in London. The cost per square metre of an apartment in central Hong Kong is HK$249,000, compared to an average of HK$115,000 in London. However, the average monthly net salary (after tax) was HK$23,637.69 in Hong Kong, while HK$26,333.14 in the UK. Wong also said that many of his friends in Hong Kong thought about leaving because of political issues and to seek a better …