Journal Issue

Supplement to the Statement by the Staff Representative on People’s Republic of China—Hong Kong Special Administrative Region Executive Board Meeting

International Monetary Fund
Published Date:
December 2010
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1. On November 19, the government announced a series of measures to curb short-term speculative activities and reduce the risk of an asset bubble in the Hong Kong property market. These measures included:

  • The introduction of a special stamp duty on residential properties, on top of the existing ad valorem stamp duty, levied at a rate of 15 percent for properties held for 6 months or less; 10 percent if held for 6–12 months; and 5 percent for property held between 12 and 24 months.
  • Disallowing the deferral in the payment of stamp duty, including the special stamp duty, for any residential property transaction.
  • Lowering the maximum loan-to-value ratio for residential properties with a value at or above HK$12 million from 60 to 50 percent
  • Lowering the maximum loan-to-value ratio for residential properties valued at or above HK$8 million and below HK$12 million from 70 to 60 percent, with a maximum loan amount capped at HK$6 million.
  • Capping the maximum loan size for properties valued at below HK$8 million at HK$4.8 million.
  • Lowering the maximum loan-top-value ratio for all non-owner occupied residential properties to 50 percent.
  • Introducing a cap of HK$6.8 million on the value of property that can be covered by the Hong Kong Mortgage Corporation’s mortgage insurance program.

The authorities indicated that these initiatives were “extraordinary measures under exceptional circumstances” and would adopt other measures “as and when necessary.”

2. Staff fully supports these measures as a proactive and well calibrated response to the current upswing in the Hong Kong property price cycle. These initiatives will have an important impact in shifting the trajectory of the Hong Kong property market to a more sustainable path.

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