Property speculators slapped with up to 15pc extra stamp duty

The government slapped additional stamp duty on property speculation yesterday in a desperate move to rein in rampant home-price inflation. The monetary authority lowered the mortgage ratio for costlier flats.

Properties purchased from today onwards and sold within six months will incur a 15 per cent stamp duty. This is in addition to the current stamp duty, capped at 4.25 per cent.

The new levy will come down to 10 per cent for transactions between six and 12 months after purchase. It will be levied at a rate of 5 per cent on sales after that, Financial Secretary John Tsang Chun-wah announced.

'The seller and the buyer are jointly liable for paying the special stamp duty,' Tsang said. The new levy will only affect properties bought from today onwards.

At the same time, the Hong Kong Monetary Authority reduced the amount banks could lend to buyers of homes worth HK$12 million or more from 60 per cent to 50 per cent of the price. The maximum mortgage ratio for properties priced between HK$8 million and HK$12 million was cut from 70 to 60 per cent. It remains unchanged, at 70 per cent, for less expensive homes - which are generally bought by end-users.

The government's move had been widely expected amid concerns about surging property prices, but the measures announced were more severe than the market anticipated. 'It's the first time I have seen the sales office so quiet,' an agent for a Cheung Kong development in Tai Wai that went on sale hours after the announcement said.