22 July 2019
The Executive Council at a special meeting chaired by Carrie Lam (inset) is said to have discussed and approved some housing-related measures. Photo: HKEJ
The Executive Council at a special meeting chaired by Carrie Lam (inset) is said to have discussed and approved some housing-related measures. Photo: HKEJ

Lam set to unveil three measures to alleviate housing woes

The government is set to launch three new measures aimed at easing Hong Kong’s housing woes, with an announcement expected soon after the Executive Council endorsed some plans Thursday. 

Under proposals discussed and approved at a special meeting of the top advisory body, chaired by Chief Executive Carrie Lam Cheng Yuet-ngor, the government will introduce a tax on vacant first-hand private residential properties.

Also, pricing of government-subsidized housing will be delinked from private market rates; and subsidized housing will be built on several sites that had originally been reserved for private developers, the Hong Kong Economic Journal reports.

The paper cited sources as saying that new flats left unsold by developers for a year or more will be taxed at 200 percent of the rateable value of the apartment, significantly up from only 5 percent at the moment. The tax will be collected through the rates mechanism.

According to one source, if a property developer leases out a vacant unit for more than half a year, it can be exempted from paying the tax concerned.

As for removing the current link between the price of subsidized flats and the market price, it is said that the price of the Home Ownership Scheme flats could go down to around half the market price as a result, and the price of flats offered under the Green Form Subsidised Home Ownership Scheme could even become 40 percent of the market price.

Details will be discussed by the Housing Authority’s Subsidised Housing Committee at a meeting scheduled for Friday evening.

To increase short-term housing supply, the third measure aims to turn nine privately-owned sites in Kai Tak and Kwun Tong into public homes, a move expected to result in 10,000 new subsidized flats in total.

Lam is set to hold a press conference Friday afternoon to provide details of the measure.

Commenting on the new measures, Stewart Leung Chi-kin, who chairs the executive committee of the Real Estate Developers Association of Hong Kong, said there is room for discussion over whether developers deserve to be punished for flats they are unable to sell even after they try hard.

Shih Wing-ching, founder of leading property agent Centaline, said vacant-property tax may end up causing developers to slow down in terms of launch of new units, but can help stabilize property prices.

Freddie Wong Kin-yip, founder and chairman of Midland Holdings, meanwhile is basically pessimistic about the effects of the three new housing measures.

According to Wong, it will be difficult for the property-vacancy tax to bolster supply of new flats to a large extent, while the other two measures that are related to public housing, in the long run, won’t be sufficient to solve the problem of demand exceeding supply.

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