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Property vs HSI - As Investment

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  1. #11

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    if you transfer to your daughter you still need to pay stamp duty at valuation of market rate (easy to put a low valuation if its an old flat; no way if its a well known estate), in fact it might be better to keep it in your name in case one day she gets married and touch wood anything happens ~ asset is still protected, thats what i plan for my kids anyway
    I am not sure what stamp duties are applicable - but some are also exempt when transfering to a close relative.


    FAQ on Special Stamp Duty (SSD)

    Nomination of a close relative(s) (that is, the spouse, parents, children, brothers or sisters) of the original purchaser(s) to take up the assignment of the residential property. If there is more than one nominee, the nominees must also be close relative(s); and sale or transfer of the residential property to a close relative(s).

  2. #12

    shri: that relates to special stamp duty (i.e. resale within 3 years), not normal stamp duty for S&P.

    there is no exemption for normal stamp duty besides inheritance as far as im aware.

    the whole list of various types stamp duties are very confusing for sure


  3. #13

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    Gotcha - should research this further. Thanks...


  4. #14

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    Good stuff in this thread. I guess the main reason for buying property instead of equities is how much more efficient the structure for leveraging is in the property market. If you want to use your shares as collateral to leverage your equity position, you will both pay a higher interest rate cost for the leverage, as well as being under other terms to top-up your account incase stock-markets drop and LTV increases.

    Whereas in the property market as long as you pay your interest rate payments, the banks are more lenient in terms of asking you to top up, just because your LTV temporarily looks pretty bad. But that of course is different in different markets. I have heard that HK banks were tougher in this sence in the past, actually asking people to come up with more cash as collateral when property prices plummet too much. That would fuel even further sell-offs, since that is forcing more people to sell, so I can't see that banks would actually do this in a big scale next time property prices fall significantly.

    So conclusion is, equity returns looks more attractive, as your conclusion says, but leverage changes the picture and usually thats why property investments in the end "win". It's really hard to get properly rich without leverage.


  5. #15
    Quote Originally Posted by RobRoy:
    Good stuff in this thread. I guess the main reason for buying property instead of equities is how much more efficient the structure for leveraging is in the property market. If you want to use your shares as collateral to leverage your equity position, you will both pay a higher interest rate cost for the leverage, as well as being under other terms to top-up your account incase stock-markets drop and LTV increases.

    Whereas in the property market as long as you pay your interest rate payments, the banks are more lenient in terms of asking you to top up, just because your LTV temporarily looks pretty bad. But that of course is different in different markets. I have heard that HK banks were tougher in this sence in the past, actually asking people to come up with more cash as collateral when property prices plummet too much. That would fuel even further sell-offs, since that is forcing more people to sell, so I can't see that banks would actually do this in a big scale next time property prices fall significantly.

    So conclusion is, equity returns looks more attractive, as your conclusion says, but leverage changes the picture and usually thats why property investments in the end "win". It's really hard to get properly rich without leverage.
    agree 100%