Hong Kong Increases Tax on Property Resold Within Two Years to Cool Market

Hong Kong raised the stamp duty on properties sold within two years, intensifying a battle against rising home prices after the International Monetary Fund warned that the asset inflation could derail the city's economy .

The stamp tax, intended to curb speculation, will be effective from tomorrow and will start at 15 percent of homes sold within six months, the Finance Secretary, John Tsang, said at a conference today. Hong Kong developers fell in anticipation of the announcement, with the Hang Seng Property Index, which tracks seven largest homebuilders in the city, such as Sun Hung Kai Properties Ltd., leaving the eighth of nine days.

The governments of South Korea to Brazil are acting to curb the inflow of funds in higher yielding markets after the U.S. extended monetary stimulus Federal Reserve. Hong Kong is to resort to raising taxes and tightening lending to curb housing prices have risen more than 50 percent since early 2009 because the island's currency peg to the dollar keeps-City facto central bank to raise interest rates.

"It's time to take some positions that are directed to speculative activity and we have to prevent excessive mortgages," said Tsang. "These measures will not affect users. We're trying to anticipate this happening."

Hong Kong Monetary Authority Chief Executive Norman Chan announced stricter measures mortgage at a separate briefing at 5:30 pm Chan said quantitative easing by the Fed can stimulate the flow of cash in Hong Kong.

Property shares fall

The indicator of property values fell 1.3 percent at the end of 4 pm local time at the lowest level since 29 October. It has fallen 7.6 percent since the peak of this year on 8 November. Ended the week 4.1 percent lower, its biggest weekly fall since the five days ended May 7.

Sun Hung Kai, the world's largest developer by market value, lost 1 percent to HK $ 134.20, while Cheung Kong (Holdings) Ltd., controlled by the richest man in the city, Li Ka-shing, fell 2.6 percent to HK $ 120.60.

Resale properties within six to 12 months will have a duty of 10 per cent of seals, while resell 12 to 24 months will be charged 5 percent, Tsang said today. The stamp duty is divided between buyers and sellers, he said.

The IMF said in a report yesterday from Hong Kong, the acceleration of inflation risk assets that cause a bust that leads to deflation and a long economic "crisis" and urged further measures to control prices. The city has increased over the past year relationships for the payment and driven land supply to curb real estate prices, which have passed a peak of 1997 on the back of historically low mortgage rates and an influx of buyers mainland China.

Sidewalks Asia

This year, the government raised the stamp duty on some home sales, increased fees for payment, stopped offering residency to foreigners who buy property in the city and the increase in land auctions increase the supply to curb housing prices, which have passed a peak of 1997 on the back of historically low mortgage rates and an influx of buyers from mainland China.

Hong Kong is "the same boat as other Asian economies as money inflows put upward pressure on property prices and consumer, Chan said in comments on the HKMA website on 4 November. The Fed has announced a plan to buy an additional $ 600 billion in public debt and support the economy, a policy of Fed chairman, Ben S. Bernanke said in remarks prepared for a conference this afternoon in Frankfurt in the final analysis, the support of emerging markets revive growth in developed economies.

South Korea, reviving a tax on foreigners investing in its bonds yesterday, Thailand is to stop for foreigners 15 per cent tax exemption on income of national obligations, while Brazil has tripled the tax on purchases of local fixed income assets for foreign investors.

More measures

Bank of Taiwan, the largest unit of the island's financial, services, today cut the amount of loans for luxury home buyers and property investors as the state-owned lender seeks to reduce credit risk.

In April, Hong Kong raised the tax on home sales of more than HK $ 20 million to 4.25 percent from 3.75 percent.

August 13 announced it is tightening rules for mortgage loans on luxury properties and investment and increase the supply of land. The mode of payment for apartments HK $ 12 million or more and for investment properties rose to 40 percent, 30 percent. Housing prices have risen from 5 percent, according to Centaline Property Agency Ltd., the largest brokerage in the city of privately owned real estate.

Chief Executive Donald Tsang said in his Policy Address of October 13 the government will stop offering residence to foreigners who buy property in the city and increased land auctions to increase supply.

More earnings

housing prices is likely that after winning 30 percent in late 2011, Credit Suisse Group AG, said in a report this month. Buyers from China, are driving demand for luxury properties, including homes in Sheung Shui, near the border of Shenzhen, Sun Hung Kai has been selling since October.

Hong Kong housing prices have more than doubled from a canal in 2003 in a recovering economy, low interest rates and an influx of buyers from mainland China who travel restrictions to the city have been little a bit relaxed. Before 2003, housing values suffered a fall that began shortly after the Asian financial crisis struck in 1997, the height of the previous bubble.

A price index for private housing prepared by the Rating and Valuation Department of Hong Kong shows the values of real estate nearly quadrupled between 1990 and peak in 1997.

Hong Kong, reported last week more than an estimated 6.8 percent expansion in the third quarter last year, surpassing the 6.1 %

Hong Kong in October 2009 closed on marketing practices criticized as misleading. In the same month, Hong Kong Mortgage Corporation Limited Mortgage loan insurance to households of no more than HK $ 12 million and suspend insurance for homes not owner-occupied.