Hong Kong scraps decade-old property restrictions to boost flagging economy

Hong Kong has announced a slew of measures to boost its real estate sector, including the removal of decade-old restrictions that were introduced to prevent a property bubble, as part of its effort to revive an economy that has been hurt by a record exodus of talent and an economic slowdown in mainland China.

Hong Kong has announced a slew of measures to boost its real estate sector, including the removal of decade-old restrictions that were introduced to prevent a property bubble, as part of its effort to revive an economy that has been hurt by a record exodus of talent and an economic slowdown in mainland China. Paul Chan, the financial secretary for the semi-autonomous Chinese city, said in his annual budget speech on Wednesday that the city would cancel all buy-side restrictions for residential homes and waive stamp duties on property transactions. The cancellation will take effect immediately. “We consider that the relevant measures are no longer necessary amidst the current economic and market conditions,” Chan told the city’s legislature. The canceled taxes include a 7.5% stamp duty on buyers who are not permanent residents in the city, a 7.5% stamp duty on those purchasing a second home and a 10% to 20% stamp duty on those who sell their homes within two years of the purchase. These taxes had been introduced as early as 2010 to cool the city’s once red-hot property market, a pillar of the economy. At the time, officials were worried about a housing bubble, in which prices rise above what is commonly believed to be reasonable or sustainable. The government will also ease property lending policies to boost housing demand.