Financial Secretary Paul Chan on Wednesday announced the scrapping of all property cooling measures, namely the Special Stamp Duty (SSD), Buyer's Stamp Duty (BSD) and New Residential Stamp Duty (NRSD).

The so-called "spicy" measures were first introduced more than a decade ago to combat property speculation, but there have been calls for the government to scrap them amid falling property prices.

Delivering his budget speech, Paul Chan said the measures were no longer necessary given the current economic and market conditions.

"We have been keeping a close watch on the residential property market. After prudent consideration of the overall current situation, we decide to cancel all demand-side management measures for residential properties with immediate effect, that is, no SSD, BSD or NRSD needs to be paid for any residential property transactions starting from today," he said.

At a press conference later in the day, Chan said the government scrapped the cooling measures because housing demand and supply are now rather balanced, compared with when the curbs were introduced more than a decade ago.

He said plenty of housing units are coming on stream in the next few years.

Combined with the Monetary Authority's move to relax mortgage rules, Chan said officials want to tackle what he called "excessive pessimism in the market".

He said there are many factors at play as to how the market could respond to the changes, including the overall economic situation, interest rate trends and people's incomes.

"The immediate assessment would be, because of the removal of these measures, the [transaction] volume would likely be going up," Chan said.

"But at the end of the day, I think whether to buy a residential property is a very personal decision depending on a number of factors specific to the individual buyers."

Separately, the finance chief brushed aside the suggestion to further reduce stamp duty on stock transactions, saying that will not necessarily lead to a higher trading volume.

Chan pointed out that authorities are taking a multi-pronged approach, such as enhancing the transaction mechanism and having more firms list in Hong Kong, to boost the stock market.
_____________________________
Last updated: 2024-02-28 HKT 21:10