The increase in stamp duty on ultra-luxury homes above HK$100 million (US$12.8 million) is unlikely to change buying behaviour, analysts said, as the structural forces underpinning demand from mainland Chinese buyers could outweigh the impact of the rise in transaction costs.
The Hong Kong government, in the annual budget on Wednesday, increased the tax rate on residential transactions above HK$100 million to 6.5 per cent from 4.25 per cent amid a surge in demand for high-end property from mainland buyers.
Property agents said the 2.25 percentage-point rise in transaction costs would not significantly impact mainland Chinese demand. They added that the authorities were likely seeking to prevent overheating before momentum accelerates further in the trophy-home segment.
“The government saw a sudden increase in large-ticket transactions this year, which signals returning confidence,” said Louis Ho Siu-tong, senior associate director at Centaline Property covering The Peak and the Southern district. “They do not want prices to rise too quickly.”
