By Ben Otto
Hong Kong will cut taxes on home purchases and stock trades, part of efforts to revive its credentials as a financial hub and boost a struggling property market.
Hong Kong Chief Executive John Lee on Wednesday unveiled a raft of measures to turn around flagging property sales. These include halving home-purchase taxes and allowing homeowners to sell without paying extra tax after after holding properties for two years, down from three years previously.
“Over the past year, interest rates have risen significantly, various economies have shown moderated growth, and transactions of the local residential property market have declined alongside a downward adjustment of property prices,” Lee said.
The new measures, he added, are being made in light of an “increasing housing supply in Hong Kong in the coming years.”
A stamp duty on residents buying additional homes will be cut in half to 7.5%, while non-residents seeking to buy a home in the city will see a stamp duty similarly halved to that level.
Lee also said that the Hong Kong Exchange, one of the largest stock markets in Asia, will reduce a stamp duty on stock trades to 0.10% of the value of the trade for both the buyer and seller, down from the 0.13% level introduced during the pandemic in 2021.
The local bourse will also lower some market-data fees later this year, and roll out new listing rules next year for research-and-development-focused companies. It will also consider reducing minimum trading spreads.
“A vibrant stock market is vital for upholding Hong Kong’s status as an international financial center and maintaining our competitiveness,” Lee said.
The moves come as Hong Kong seeks to bolster its reputation as a place for global business amid rising risks related to U.S.-China tensions, an economic slowdown in the mainland and the city’s tightening of national-security regulations. The number of U.S. companies operating in Hong Kong has fallen for four years in a row, last year hitting its lowest level since 2004, The Wall Street Journal recently reported.
In another move, Lee said the city would seek to strengthen its offshore-yuan business by promoting the inclusion of yuan counters under the Southbound Trading of Stock Connect, facilitating the trading of Hong Kong stocks in the currency.
“We will take forward the introduction of offshore mainland government bond futures and enrich the variety of RMB investment products, with a view to strengthening Hong Kong’s position as an offshore RMB center,” he said.
Write to Ben Otto at [email protected]
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