HK govt will be proactive on land, housing
Updated: 2019-10-15 07:35
By Oswald Chan in Hong Kong(HK Edition)
Administration says it has had LegCo consider a tax law to discourage apartment-hoarding
As the Hong Kong government prepares to unveil its land and housing policy in Wednesday’s 2019 Policy Address, there are signs indicating that the administration will take a more diverse and proactive approach to this deep-seated intricate social and economic issue.
After the Legislative Council convenes for this year on Wednesday, it will deliberate the government’s proposed property vacancy tax, designed to discourage developers from apartment-hoarding.
The proposed tax law, announced in mid-September, targets newly built apartments, which would be levied at a tax rate of 200 percent of the property’s annual rental rate if they remain unoccupied for six months in any year.
A grace period will apply for the first 12 months after obtaining an occupation permit. The new tax will not apply to vacant properties held by individuals other than their developers.
According to the latest government statistics, there were about 10,000 vacant units in the primary market at the end of June. This amounts to about 20 percent of the total number of vacant units in the market as of the end of 2018.
“Although the new levy will only apply to a small portion of the market, it is still likely to help lift supply that is desperately needed over the near term, with developers to accelerate launches of new residential projects ahead of the implementation of the vacancy tax,” said Henry Mok, senior director at Jones Lang LaSalle Hong Kong’s Capital Markets.
More vigorous measures are also anticipated as the government may announce in the Policy Address a large-scale land-requisition program to boost land supply.
“We believe that resumption and speeding-up in new-town development could become a major focus for the government, and we could see signs of such a scenario in the coming policy speech,” said Jonas Kan Kwok-yu, head of Hong Kong/China property research at Daiwa Capital Markets.
“This could mark the beginning of a change in the housing supply dynamics in Hong Kong,” he added.
Last month, the Hong Kong government announced it will take back 784 plots of private farmland covering 68 hectares in the northern New Territories for new town development in Kwu Tung North and Fanling North, on which 71,800 units will be provided when the area is fully developed.
Secretary for Development Michael Wong Wai-lun said that the government will aim to take ownership of 400 hectares of private land under the Lands Resumption Ordinance over the next five years, and that this law has been invoked 13 times for public rental housing since Hong Kong’s return to the motherland in 1997.
The government also reported that it is considering enhancing the apartment supply by stipulating that certain residential apartments may be sold only to Hong Kong residents when the government sells certain land parcels to developers.
The Hong Kong Real Property Federation proposed last week the government build temporary housing in vacant school premises and barge boats because it may take over 10 years to complete a public housing project if the government invokes the Lands Resumption Ordinance to reclaim land.
oswald@chinadailyhk.com
(HK Edition 10/15/2019 page4)