Unit tax needs cautious study

2018-05-24 21:59:39

The Government will carefully consider the proposal to impose a new tax on unsold private residential units.

Secretary for Transport & Housing Frank Chan told the Legislative Council today the Government is aware of the increasing number of unsold first-hand private residential units in completed projects and it is studying ways to address the issue.

As at March 31 there were 9,000 unsold units in completed projects, among which 6,000 were completed last year or in the first quarter of this year, while the remaining 3,000 were completed between 2011 and 2016.

The Government will consider the proposal's justification, feasibility and effectiveness.

Mr Chan added levying a vacancy tax on residential units owned by non-local residents may not be an effective way to increase housing supply as the vacancy rate is low.

According to Rating & Valuation Department statistics, the vacancy rate of private residential units dropped to 3.7% at the end of last year, substantially lower than the long-term average vacancy rate of 5% from 1997 to 2016.

Mr Chan also said the Government has no plan for a capital gains tax as it is very controversial and will complicate Hong Kong's simple tax regime.

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