Jake's View | What happens when the justice secretary’s very action encourage people to disrespect the law?
The [flat purchase] document was signed by Cheng’s [Justice Secretary Teresa Cheng Yeuk-wah] husband, Otto Poon Lok-to, on her behalf but it specified Cheng as the buyer.
It also showed that Cheng paid HK$2.635 million in stamp duty – she should have had to shell out HK$9.3 million if she had not purchased it as a first-time buyer.
-- SCMP, January 23
But she apparently deemed herself a first-time buyer as the other properties she owns were bought through corporate name.
It’s a common enough dodge. Instead of buying a flat in your own name, you form a company and have the company buy it.
This way, the flat can change hands an infinite number of times in the future and yet never again be bought or sold. It is the company which has bought and sold.
The immediate advantage is that the stamp duty on the transfer of company shares amounts in total to only 0.2 per cent of the value of the transaction. The basic stamp duty on sales of homes, however, is 1.5 per cent for any transaction over HK$3 million (US$383,680) and only the tiniest micro flats now sell for less than that.
