Vacancy Tax - Hong Kong

[nivek2046]

I predict Vacancy Tax will happen this year in Hong Kong.

https://en.wikipedia.org/wiki/Vacancy_tax

[PLamHK]

I predict that if it happens it will raise a trivial amount of money. Maximum HK$5K per property per month, because if the tax is more than that then the owners will simply hire an FDH to live in the property.

[aw451]

Vacancy taxes are to disincentivise holding inventory rather than to raise money. However, it would cause property prices to drop which his why it will never happen.

[mtkl]

I predict that if it happens it will raise a trivial amount of money. Maximum HK$5K per property per month, because if the tax is more than that then the owners will simply hire an FDH to live in the property.

Clever. Government would have difficulty saying an FDH “doesn’t count” (even based on resident status as there are plenty of non-residents (tourist visa) that have a genuine second home in HK).

Actually hiring an FDH would end up being a net loss for the tax base as the FDH would be eligible for health benefits, etc

If one hired an ex-carpenter as an FDH, could do some renovations too

[mtkl]

I predict Vacancy Tax will happen this year in Hong Kong.

https://en.wikipedia.org/wiki/Vacancy_tax

Will that be before or after the CNY is moved to summer months?

[East_coast]

I predict Vacancy Tax will happen this year in Hong Kong.

https://en.wikipedia.org/wiki/Vacancy_tax

Why do you think HK wants to increase its useful and used housing supply?

[nivek2046]

You can kill five birds with one stone:

(1) the government gets some revenue (in the form of Vacancy Tax)

(2) companies have more places to do businesses; government gets more profit taxes.

(3) People have more places to buy/rent as their homes. SDU problem can be easier dealt with .

(4) Property/rental markets will drop to a more reasonable level.

(5) This will finallly kickstart the Hong Kong's economy (because of lower rents); government gets even more profit taxes/stamp duties/rates/property taxes





PS All that is needed is for the HKMA to tell the banks not to "call loan" despite lower rents, as long as the mortgagees are repaying every month.

[WineLuver]

You can kill five birds with one stone:

(5) Property/rental markets will drop to a more reasonable level.

I don't think the government wants that.
Rents drop to more reasonable level > Less value of land > Less proceeds from land sale.

[nivek2046]

Will that be before or after the CNY is moved to summer months?

I predict Paul Chan will announce the details next month.

[nivek2046]

I don't think the government wants that.
Rents drop to more reasonable level > Less value of land > Less proceeds from land sale.

Once economic activities resume, property prices will go up again.

Right now, there are too many empty shops.