Hong Kong’s October stamp duty income jumps as non-resident property buyers pile in to pick up bargains amid oversupply

Individual and corporate homebuyers piled into Hong Kong property last month to pick up bargains as city developers offered the most number of units for sale in several months after a surprise relaxation of mortgage entitlements for first-home buyers.

Buyers’ stamp duty, a 15 per cent surcharge on the price of a property that must be borne by non-permanent Hong Kong residents and corporate buyers, soared 2.8 times last month to HK$880 million (US$112.4 million), while the number of transactions jumped 1.8 times to 296, according to data by the Inland Revenue Department.

October was one of the more active months for property sales, after Hong Kong’s Chief Executive Carrie Lam Cheng Yuet-ngor on October 16 announced an unexpected increase in loan entitlements for homebuyers. At least 1,356 units were offered for sale last month, including Sun Hung Kai Properties’ Cullinan West III in Nam Cheong, CK Asset’s Seaside Sonata in Sham Shui Po and the Upper Riverbank project in Kai Tak by Longfor Group and KWG Group.

“Market sentiment [last month] was a little better than before,” said Ricacorp Properties’ head of research Derek Chan, adding that “it is possible” that the popularity of Cullinan West III among mainland Chinese buyers “drove the sharp rise” in transactions and stamp duties. “The previous base was too low so the increase would be more significant with more interest from mainland buyers.”

The amount of double stamp duty, an extra 15 per cent surcharge that must be paid by buyers who already own a home in Hong Kong, tripled to a five-month high of HK$1.18 billion, while the number of transactions rose to 481.