Hong Kong to cut stock trade stamp duty to 0.1%, half home purchase tax to 7.5%

In an attempt to bolster the property market and stabilise the ailing economy, Hong Kong's leader has announced slashing extra stamp duties for some homebuyers and lowering the stock trade stamp duty.

In his annual policy blueprint on Wednesday, Chief Executive John Lee said stamp duty would be halved to 7.5% from 15% for second home buyers and non-citizen buyers with immediate effect, Reuters reported.

Other adjustments were made to allow some homeowners to sell properties after two years without incurring hefty duties. 

Moreover, the government would continue to increase the overall supply of land for public and private housing, Lee said.

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After the announcement of these measures, shares of two major residential property developers Sun Hung Kai Properties and Henderson Land eased 0.2% and 1%, respectively, in early afternoon trading.

Additionally, stamp duties for stock transactions would also be reduced to 0.1% from 0.13% to help bolster liquidity in the Hong Kong market. The market data fees would be cut later this year to help brokerages.

Lee said Hong Kong would seek to strengthen its role as an offshore yuan centre and bolster financial ties to China, Reuters reported.

The government also plans to expand its campaign to attract top international talent, having drawn 160,000 applicants last year, of which 60,000 had already arrived, mostly from mainland China. A new entrant scheme for investors will also be introduced for those who invest at least HK$30 million ($3.8 million) in stocks, funds, bonds, excluding real estate, the report added.

(With inputs from Reuters)