According to the government’s initial plan, Chief Executive Carrie Lam Cheng Yuet-ngor was supposed to officially decide on the proposed tax on vacant first-hand private residential properties and announce its details on Tuesday after the Executive Council meeting.
However, the plan would no longer fly as Lam was suddenly summoned to Beijing to brief Vice Premier of the State Council Han Zheng on the views and suggestions of the Hong Kong government and different sectors of the community regarding the Guangdong-Hong Kong-Macao Bay Area development plan.
Given the sudden change of schedule, Lam is unable to chair today’s Exco meeting, and hence no official announcement on the launch of the empty-homes tax.
Yet in order to deliver on her promise, it is said that the administration is likely to have to call a special Exco meeting later this week to discuss the proposal.
Almost a year after Lam assumed office as chief executive, Hong Kong’s sizzling property market has shown no signs of abating.
And almost everyone agrees that rising home prices remain the chief cause of mounting public grievances in the city.
Thus, it is a matter of utmost urgency for Lam and her administration to devise drastic measures, including the vacant property tax, to address this pressing issue.
According to Financial Secretary Paul Chan Mo-po, there are currently about 18,000 pre-sale homes that have been approved or need no approval, and the new tax is intended to press real estate developers into putting these new flats up for sale as soon as possible.
However, there are still skeptical voices about the efficacy of the proposed tax.
A lawmaker told us that during private meetings between the government and lawmakers on the issue, even housing officials themselves conceded that the new tax might not be of much help in cooling down the overheated property market in Hong Kong.
But these officials also pointed out that as home prices continue to skyrocket and big developers keep hoarding up their newly built flats, the government simply cannot afford to allow the situation to continue and risk coming under fire for doing nothing.
As such, this lawmaker said, imposing the vacant property tax, which is indeed a political decision more than anything else, is still necessary.
This article appeared in the Hong Kong Economic Journal on June 25
Translation by Alan Lee with additional reporting
[Chinese version 中文版]
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