Blog

New initiatives on housing

A gist of the blog:

Last week, the Government announced six new initiatives on housing, among which are the proposed Special Rates on vacant first-hand private residential units collected at two times the ratable value of the units concerned (the so-called vacancy tax), and the amendment of the Lands Department Consent Scheme to require developers to offer for sale no less than 20% of the total number of residential units subject to the relevant pre-sale consent at each turn of sale.

The objective of the Special Rates is to ensure those unsold and completed first-hand private residential units can be timely and effectively made available in the market for sale or rent. In addition, the amendment of the Lands Department Consent Scheme will discourage developers to sell flats in small batches, and thereby facilitate healthy development of the market.

When considering the measure of Special Rates, we cannot just focus on the number of completed first-hand flats at the moment. According to Government’s projection, the average number of units completed per year in the past five years (from 2013 to 2017) was 13500, while that in the next five years will be around 21000. As at end April, the number of residential units that can be put up for sale by the developers amounts to 18000. In addition, the number of units in the property projects meeting the criteria for applying for pre-sale consent totalled 28000. Therefore we need to take forward looking measures so that the housing supply can reach the market as early as possible.

July 1, 2018