Last Friday Chief Executive Carrie Lam Cheng Yuet-ngor finally unveiled a new set of initiatives to curb skyrocketing home prices in Hong Kong.
Among the new measures is the vacant property tax, which is intended to make big developers sell their newly completed first-hand flats within 12 months after they have been issued “occupation permits” by the Buildings Department.
The tax, which will be set at 200 percent of a newly built unit’s rateable value, has to get the green light from the Legislative Council first.
And since our city doesn’t have any legislation concerning vacant property tax, the government will have to draft a new law and then push it through Legco, most likely with intense arm-twisting and lobbying.
This law-making process could last years, according to more than one member of the Executive Council.
As such, the government is likely to bypass the entire standard procedure and take a shortcut: instead of making a new law from scratch, the administration could simply propose amendments to the existing Rating Ordinance, thereby saving a lot of time and effort.
Quite a number of Executive Council members believe that by doing so, the government can substantially expedite the scrutiny of the new tax by Legco.
And given the support of the pan-democrats such as the Professionals Guild, they say the government is pretty confident that it can secure a simple majority in the legislature despite the opposition of some pro-establishment lawmakers and expect to get the new tax up and running by the end of this year.
Dennis Kwok Wing-hang, the Civic Party and the Professionals Guild lawmaker representing the legal functional constituency, agrees that it is the right way to get the new tax off the ground.
Kwok said quite a number of pan-dems are in favor of the new tax, and therefore the key to success is when the administration is going to submit the amendments to the Rating Ordinance to Legco.
He also warned of possible attempts by some pro-establishment lawmakers to stall the tax proposal, and urged the government to table the new amendments as soon as possible.
An Executive Councillor pointed out that even though the real estate sector has been overwhelmingly skeptical about the efficacy of the empty homes tax, the new measure has apparently hit them where it hurts, or else there wouldn’t have been such a strong opposition from big property developers.
This article appeared in the Hong Kong Economic Journal on June 28
Translation by Alan Lee
[Chinese version 中文版]
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