Vacant Property Taxed Mulled in Hong Kong

January 21, 2013 Taxation in Hong Kong

Hong Kong government buildingHONG KONG – Residents of Hong Kong could soon breathe a sigh of relief as new measures are mulled to ease the city’s shortage of houses.

In a radio interview conducted on January 20th the Chief Executive of Hong Kong Leung Chun-ying said that in the near future a tax may be imposed on newly built properties which are not sold to the public but are left vacant.

The proposed measure is aimed at addressing the cities growing housing problem by penalizing property developers who intentionally withhold large numbers of houses from the market in order to manipulate housing prices and artificially increase sale prices and rental costs.

Leung Chun-ying explained that property developers purchase land from the Hong Kong government under the condition that they complete construction of an allotted number of properties before a preset deadline, however, no mandate is issued on when the properties must be sold.

According to current estimates, there are approximately 4 000 privately developed properties in Hong Kong which are unsold and are sitting vacant, and nearly one third of apartments built last year are still empty.

Explaining his opinion on developers who intentionally hold back sales, the Chief Executive said “…if there really are attempts to hoard and hold prices high … I will not just sit and do nothing.”

Photo by Synapticism