Developers race to exploit a loophole in Hong Kong’s vacancy tax before a patch is made
Hong Kong’s developers are racing to exploit a loophole in the vacancy tax announced on June 29 for increasing housing supply, before the city’s Legislative Council mends the gap when it gets around to passing the bill for enacting the levy.
The tax, announced by Chief Executive Carrie Lam Cheng Yuet-ngor, would make completed homes that are left vacant for more than six months after receiving the occupation permit liable to a levy equivalent to about 5 per cent of the property value.
The policy was announced to pry loose thousands of units of completed - but unsold - residential property from developers’ hands to add to the housing supply and ease price pressure in the world’s most expensive residential property market. Lam has made housing affordability a major tenet of her administration’s priorities.
In response, some developers are leasing their projects to associates to remove them from the vacancy list. Nan Fung Developmentleased two completed duplex apartments and two villas at Deep Water Bay to four companies controlled by its senior management.
The senior management team included Nan Fung’s honorary chairwoman Vivien Chen Wai-wai and her daughter Karen Cheung Tih-loh, as well as one of their associates Ho Hoi-ki, according to Land Registry data.
