Insufficient first-hand vacant tax

Insufficient first-hand vacant tax

The author has been actively advocating that the government should levy a “one-hand vacant tax" (hereinafter referred to as “vacant tax") to developers. Since the Chief Executive, Mrs Carrie Lam, announced that he would levy this tax more than 9 months ago, the SAR Government finally submitted a legislative proposal to the Legislative Council last week to levy an additional difference of twice the rateable value to a vacant private residential unit.饷".

The author advocates that there is only one goal of this policy. I hope that developers will not wait for the price and deliberately deduct the unit and push up the property price by controlling the supply. However, depending on the government’s legislative proposals, although the direction is consistent with the target, the strength is not enough. It is not enough to drive the developers to sell the units as soon as possible.

The Government proposes that developers should sell or rent out flats after 12 months of issuing “Occupation Permit". Otherwise, they will be vacant and will be required to pay vacant tax, which is twice the difference between vacant flats. For the fiscal year 2019-20, the rate levy rate is 5%, and the vacant tax is 10% of the rateable value.

It’s hard to work without counting numbers.

The tax rate proposed by the government is not a gradual increase, that is, the tax for the developer in the first year and the second year is the same. Why do developers need to sell units as soon as possible? The author once asked the government to implement the gradual increase. The tax rate should increase year by year, from 33% of the first year’s rateable value to 30% in the second year to 66% in the third year and later. Unfortunately, the government rejected this proposal on the grounds of computational complexity.

Another recent phenomenon that has attracted market attention is that developers have sold a large number of first-hand units by way of tenders, resulting in extremely opaque markets. The developer is not required to provide a price list by bidding for the sale of the unit. It is only the developer who knows the price. It is a black box operation and controls the supply of new discs in disguise.

As long as the developer claims that the price of the bid is all “less than price", one unit will not be sold. This is similar to the “squeezing toothpaste" type of sales that the market has been paying attention to earlier.

Earlier, the author raised a written question asking the Government to respond to the above situation and whether it would restrict developers from selling a residential project of a certain size by tender. Will it require a public offering and tender for each round of sales arrangements? The proportion or minimum number of units to be sold. As I have expected, the Government has only stated that it will continue to pay attention to the sale of first-hand residential properties. At this stage, there is no plan to use the number, proportion or number of flats for developers to tender for sale under the “Pre-sales Flower Agreement". Regulations." Reflecting the government’s “unconscious" of the problem.

Tender sale and manipulation market

Some media have compiled data on the recent sales of first-hand buildings. It is found that nearly 60% of the units were sold by tender in March, and the ratio cannot be ignored. In the first quarter of 2019, the first-hand units sold through tenders accounted for nearly 30% of the total.

Last week, the Real Estate Developers Association asked members to have at least 20% of the units to be publicly offered when they first sold non-luxury first-hand buildings. In other words, the proportion of developers selling through tenders can still be as high as 80%. What’s more, the Chamber of Commerce does not define what it means to be a “luxury home". Developers can naturally claim that all of their new flats are luxury homes. In fact, a property in Pak Shek Kok, from the first round of sales, all the units launched are sold by tender, so it is not a manipulation of the market?

Both of these are major people’s livelihood issues concerning housing issues. However, in the face of business obstruction and the government’s priority in implementing the political tasks of the National Anthem Law and the Fugitive Offenders Ordinance, it is believed that the “empty tax on the first floor" will certainly give way. The SAR Government often hangs on the development of the economy and the improvement of people’s livelihood. In fact, it is actually shameless after the politics and the people’s livelihood.