visimoney
TLDR:
- Hong Kong’s finance chief, Paul Chan, has not ruled out reintroducing property cooling measures if the market situation changes.
- Despite facing a deficit, the city does not need to impose new taxes as revenue from land sales is expected to increase after the scrapping of cooling measures.
Hong Kong’s finance chief, Paul Chan, announced that authorities have not completely ruled out bringing back property cooling measures if necessary due to changes in the market situation. While facing a deficit, the city does not see the need to impose new taxes as the revenue from land sales is projected to increase after the removal of cooling measures. Additionally, Chan believes it is unnecessary to make any “overly progressive” moves at this stage.
In his latest budget blueprint, Chan surprised the market by immediately scrapping all cooling measures that were originally introduced over a decade ago to limit property speculation. He emphasized that with little speculative activity and sufficient home supply, this was an appropriate time to eliminate the measures. However, he reassured that if there were any changes in the market, the government would be prepared to reintroduce these measures.
Despite the ballooning deficit and the city’s lowest fiscal reserves in a decade, Chan dismissed suggestions of implementing new forms of taxes such as a land-based departure tax or reviving the red wine tax from 2008. Emphasizing the need to give corporations and residents space to recover from previous losses, he avoided aggressive taxation measures that could affect Hong Kong’s competitiveness.
Looking towards the future, Chan expressed confidence in the city’s land sale revenue increasing following the removal of cooling measures as developers would want to replenish their land supply once the housing market stabilized. Despite some public disappointment regarding the lack of financial incentives in the budget, Chan stressed the short-term reliance on tourism to strengthen the economy through consumption.
