Buyer's Stamp Duty

Buyer's Stamp Duty (BSD), a 15 per cent tax on property transactions imposed on non-permanent residents, is designed to cut speculation in the local property market from the Hong Kong government. In particular, it is designed to cut speculation by mainland buyers.

The government increased the existing Special Stamp Duty (SSD) and introduced this BSD in late October this year to curb speculation amidst the tight supply and high demand in Hong Kong's residential property market.

Many people claimed that speculation simulated high property price. Speculation is confirmor sales, which is where a property owner resells a property before he has transferred legal title.

The proportion of residential confirmor sales reached a record low from market data. In other words, with speculators playing residential property an immaterial part of the market already, action by this class of players would be next to minimal.

As mainland buyers pull out of Hong Kong residential real estate, developers could expect collective demand for the properties drop. But the government expected the measures to help reduce the risk of a property bubble and maintain the stability of the macro-economy and the financial system.

In comparison, Singapore Government also introduced Additional Buyer's Stamp Duty for 3% to control investment demand for private residential property and create a more stable and sustainable market. Singapore citizens own two and buy their third and subsequent residential property would pay this Additional Buyer's Stamp Duty. The same figure applies to permanent residents owning one and buying the second and subsequent residential property. 10% Buyer's Stamp Duty is payable by foreigners and non-individuals (corporate entities) buying any residential property.

Both government strive for their best to monitor their property markets. As it is one of basic necessity, citizens would like to have an acceptable and stable property market to contribute a harmony society. It should improve the standard of living for the territory or area by stable property markets.

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