【明報專訊】OVER the past four months, Hong Kong's property prices have reached one high after another, with loopholes manifesting themselves in the package of government measures aimed to rein in speculation in the property market and help Hong Kong people buy their own homes. In One Kai Tak, there are dozens of cases in which buyers have been able to buy more than one flat each, while in other first-hand property markets, cases of "one contract for multiple flats" have increased sharply. Investors have left no stones unturned to circumvent the government's stamp duty policies aimed to cool the property market, showing that there is always a countermeasure against every measure issued from above. The government should close such loopholes as soon as possible to prevent speculators from gaming the system.
According to statistics, over the past five months, there have been 421 contracts that were entered into for more than one first-hand flat in Hong Kong's 28 new property projects. These contracts involve 956 apartments, which in total are worth more than $17 billion, or 26 percent of the whole amount of transaction over the same period. Since the government calculates stamp duty with one contract as the basic unit, some speculators have used one single contract to buy more than one flat to circumvent the market-cooling measures. What is ironic is that some of these buyers have made the purchases as "first-time buyers". One of them who claims to live in a "small- to medium-sized" flat has, for example, spent $145 million on 15 units of K. City at one go. These so-called "first-time buyers" are apparently not the people such policies are intended for.
Such ridiculous things have happened primarily because the government's definition of "first-time buyers" is too lax–anyone who is "not holding any residential property" is eligible for the exemptions. This gives speculators an opportunity to game the system. All they have to do is transfer their ownership of property to someone else before buying a flat. In practice, this can mean buying a flat under the name of their children or family, or a husband and a wife forgoing joint ownership of property so that one of them can become "free" to purchase a flat as a "first-time buyer".
Leung Chun-ying proposed the "Hong Kong land for Hong Kong people" policy when running for Chief Executive in 2012. The policy was aimed at helping the younger generation of middle-class people to buy their own homes, as they are not very well-off. However, the policy has been implemented in a way that departs from its original intention and has become an investment vehicle for speculators. Hence the situation of "one contract for two flats". In One Kai Tak, the first "Hong Kong land for Hong Kong people" project, 310 units of Phase 2, Block 3 have gone on sale lately. 30 contracts were entered into for more than one flat. In total, 60 flats are involved, and they account for nearly 20 percent of all the flats that have been put on sale. Some of these flats are not adjacent to each other. Nevertheless, all these buyers made the purchase as "first-time buyers", meaning that they are exempt from paying the extra stamp duty. The Conditions of Sale of One Kai Tak state that the residential flats cannot be resold within 30 years unless otherwise approved. Owners who want to lease out the flats must file an application with the Lands Department, and the period of the lease must not be longer than five years. Such arrangements were intended to discourage speculators and investors. However, the land lease does not specify that each buyer can only buy one residential flat. This has become one of the major loopholes of the policy.
The situations of both "one contract for multiple flats" and "one buyer buying multiple flats" show that the government's measures to curb speculation contain loopholes, which should be closed as soon as possible. It is necessary for the government to so amend the regulations on stamp duty as to calculate the duty with the number of flats–instead of the number of contracts–as the basic unit. It must also tighten the definition of "first-time buyers" in order to prevent investors from circumventing the measures.