Unpaid property taxes piling up in law firms a risk as Legco delays stamp duty bill, John Tsang claims

Law firms risk having to keep an increasing amount in property taxes paid by clients because of a delay in passing legislation to enact a doubling of stamp duty, the financial chief claims.

The extra stamp duty has been collected on transactions since February last year, but will not be paid to the government until it is enshrined in law.

In his weekly blog yesterday, John Tsang Chun-wah complained about filibustering and wrote that the delay in passing the measure had forced law firms to keep an "enormous amount" in unpaid stamp duty, most of it levied on purchases of non-residential properties.

"The legal sector has repeatedly expressed to us their worries about the risk of keeping the money," Tsang wrote, without elaborating on the nature of the risk. "If we are forced to resume debate on the second reading on Friday or even later due to filibustering or other reasons, there will be a bigger risk the bill will not be passed."

The Legislative Council's three-month summer recess begins on July 15.

Tsang said the delay in approving the doubling of stamp duty made it harder for the government to respond promptly to changing circumstances in the property market.

However, a senior conveyancing lawyer said the professional code of conduct required law firms to keep a separate account for their clients' money.