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Buying properties using other’s identities for alleviating tax duty is an offence

A gist of the blog:

The Government announced the New Residential Stamp Duty (NRSD) measure on November 4, 2016 to increase the ad valorem stamp duty (AVD) chargeable on residential property transactions to a new flat rate of 15 per cent. The Government has tightened the property stamp duty mechanism with effect from 12 April 2017 to stop buyers from avoiding tax by purchasing multiple new residential properties under a single contract.

Recently, there are reports that some residential property buyers used other people’s name for buying property in order to get around the 15 per cent stamp duty. I would like to remind all citizens that under the existing regime, when applying to Inland Revenue Department for stamping at the lower AVD rates at Scale 2, a buyer has to submit a statutory declaration and declare that he/she is a HKPR acting on his/her own behalf. A buyer who wilfully makes a false statement in the statutory declaration made by virtue of the Oaths and Declarations Ordinance may commit the relevant criminal offence under the Crimes Ordinance. If it is subsequently found that the buyer's declaration is not correct, the buyer will be liable for paying the duty difference, as well as the penalty incurred by late stamping, and the relevant parties may even face imprisonment and fines.

As at the end of March 2017, the potential supply from the first-hand private residential property market in the next three to four years will be reaching a record high level of around 96000 units, which will help ease the tight supply of flats in the past few years. In light of the increasing supply and the continued normalization of US interest-rate, the public should carefully assess the potential risks before making a home purchase decision.

April 30, 2017