February 23, 2023
In an effort to aid individuals in getting on the housing ladder, Hong Kong is reducing the tax rate for first-time buyers of properties under HK$20 million ($2.5 million).
The proposal, according to Financial Secretary Paul Chan, intends to lessen “the burden on ordinary families of purchasing their first residential properties, especially small and medium residential units,” as he stated in his budget speech on Wednesday. According to him, the move will help 37,000 buyers and will cost the government about HK$1.9 billion annually.
The present tax for these buyers varies depending on the property values. Homes with a greater value will now be taxed at a lower rate than they were before the new measure went into effect today. For instance, the tax rate for first-time buyers with Hong Kong citizenship will be reduced from 3.75% to 3% for an apartment priced at HK$8 million.
The 4.25% tax rate will continue to apply to properties valued more than $20 million Hong Kong dollars.
The plan could also help the city’s real estate market, which last year saw prices fall 16% as a consequence of higher interest rates. More new buyers may decide to buy homes if rate increases are more gradual and taxes are cheaper.
Source: BnnBloomberg
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