A new vacancy tax plan is forcing property developers to sell unsold units faster, reported the South China Morning Post.
The tax, at 200 percent of a newly built unit’s rateable value, which is the estimated annual rental value of a property, aims to prevent developers from hoarding newly built flats, and will apply to all homes that have been unsold for more than six months. Announced by Hong Kong Chief Executive Carrie Lam on 29 June, the tax aims to boost supply and cool the world’s least affordable property market.
Following the announcement, developers Paliburg Holdings and Regal International have taken HK$10 million off the price of one of their unsold villas in Yuen Long to HK$29.4 million, according to the SCMP this month. A private developer owned by Kwok Kwei-wo and Tang Yuk-kwei discounted two units of their village houses in the same area by about 20 percent. To date, the completed units remained unsold for two years.