The Legislative Council in Hong Kong recently requested information to enable it to assess the effect of tax changes that were brought in to ensure that the housing market did not overheat. These measures included the Special Stamp Duty (SSD) introduced in November 2010 and charged on residential property that is sold within a short period of its acquisition. In October 2012 the government raised the rates of this tax to between 10 percent and 20 percent of the transaction amount, depending on the length of time the property was held, and also extended the applicable holding period from 24 to 36 months.
The Buyer’s Stamp Duty (BSD) was first proposed in October 2012 but owing to a delay with its approval it began to be collected in March 2014, backdated to October 2012. This tax applies to residential property deals where the acquirers or transferees are not permanent residents of Hong Kong acting on their own behalf. This is charged at 15 percent on the transaction amount. It has now been disclosed that in the first month of operation 1,827 persons paid this tax.
