Policy Address

Abolishing Doubled Ad Valorem Stamp Duty on Non-residential Property Transactions

70. In order to alleviate the financial burden of enterprises and support them in obtaining commercial loans, the Government has rolled out the 90% Guarantee Product and the Special 100% Guarantee Product in the past year. Meanwhile, many banks have been offering extension of principal payment holiday with the support of the Hong Kong Monetary Authority. Some Members of this Council have proposed that the Government should abolish the Doubled Ad Valorem Stamp Duty (DSD) imposed on non-residential property transactions, so as to facilitate enterprises to cash out by selling non-residential properties to address their financial predicament or liquidity needs because of the economic downturn. At my request, the Financial Services and the Treasury Bureau has recently completed a review of the measure, which was introduced in 2013 as a demand-side management measure to rein in the soaring prices of non-residential properties.

71. As a result of the economic downturn and uncertainties surrounding the COVID-19 pandemic, prices and demand for non-residential properties have been dropping over a period of time. The Government considers now the right time to abolish the DSD imposed on non-residential properties. To allow relevant property owners to benefit immediately from the proposal, the Executive Council approved this morning the introduction of the relevant amendments to the Stamp Duty Ordinance. I have also exercised my statutory powers and made a Public Revenue Protection Order to give effect to the abolition of the DSD on non-residential property transactions with effect from tomorrow (26 November). We will continue to monitor the developments of the non-residential property market, and resort to appropriate measures again as and when necessary to ensure the stable development of the market. Given the tight housing supply and that residential property prices remain beyond the reach of the average households, I must stress that the Government has no plan to adjust any of the stamp duty rates concerning residential properties.