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Hong Kong residential market gets a boost from stamp duty change

The volume of residential property sales in Hong Kong in May rebounded for the second month in a row as developers continued to offer buyers attractive deals on new schemes.

In total, there were 5,270 transactions in May, 10% higher than the previous month and the highest level of the past 15 months, according to the latest monthly report from Knight Frank. Within that, the number of luxury residential sales worth HK$10m (£760,000) or above rose 17% month-on-month to 505 transactions.

Sales of secondary homes grew 20% from the previous month, as more owners were willing to offer discounts to compete with new build units offered at competitive prices, according to the report.

Another boost to the market came in the middle of May when the government proposed a relaxation of the Double Stamp Duty. This made it easier for buyers of second homes to obtain a refund of the tax. Previously, buyers had to sell their first homes within six months of the second homes’ ‘sale and purchase agreement’ to be eligible for the refund.

Now, the six-month period starts from the ‘conveyance on sale’ for the second homes, giving buyers more time to dispose of their first properties.

Buyers of off-plan new-build flats therefore have up to 36 months to sell their first property in order to qualify for the rebate, the report points out.

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