News Analysis: New measure to reduce cost of home purchase for incoming talent
In its latest policy address, the government announced that eligible incoming talent who purchase a residential property in Hong Kong from now on are allowed to refund the extra stamp duty paid, including Buyer’s Stamp Duty (BSD), upon turning into permanent residents after residing in Hong Kong for seven years. This makes the overall stamp duty paid by incoming talent on par with that of permanent residents who acquire their first property in Hong Kong. We believe such an initiative would not be attractive enough to induce incoming talents to buy flats in Hong Kong, given the high initial financial burden of acquiring a residential property and long holding period required for the reimbursement of the extra stamp duty. This would not serve to revive home demand and stabilise the market. Nonetheless, we believe that in the event of a sharp market correction that triggers increased risk for the financial system, we do not rule out the possibility of the government revisiting the existing cooling measures.