Real Estate Proposals to Watch Ahead of the Policy Address

With the Policy Address scheduled for release on September 17, real estate policies are expected to be a major focus. Industry and political leaders have already put forward various proposals, some of which may be adopted. Here's an overview of the most notable suggestions.

The Policy Address is usually announced in October, but this year the release date has been moved forward. This adjustment is due to the Legislative Council elections, which will take place at the end of the year. With the current legislative term ending early, the consultation period and announcement timeline for the Policy Address were adjusted accordingly.

The Real Estate Developers Association of Hong Kong has proposed raising the price cap for properties eligible for the HK$100 stamp duty policy. Currently, properties priced at HK$4 million or below qualify, but the proposal suggests increasing the cap to HK$6 million. Stewart Leung, chairman of the Executive Committee at the association, believes this adjustment would make it easier for first-time buyers to enter the market. While it may reduce short-term stamp duty revenue, he anticipates that the increase in transactions would offset the loss, resulting in no net impact on government income.

Another proposal from the association suggests easing restrictions for investment immigration. At present, individuals with investment immigration status can include up to HK$10 million of their total investment in real estate purchases, provided the property is worth at least HK$50 million. The association has proposed raising this cap to HK$20 million to stimulate the mid-tier property market.

Meanwhile, both the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) and the New People’s Party have suggested establishing measures to help mainland Chinese buyers transfer funds for purchasing properties in Hong Kong. They recommend creating a system modelled on cross-border financial arrangements, ensuring a closed-loop system for streamlined fund transfers.

The DAB has also proposed reintroducing the Tenants Purchase Scheme, allowing existing tenants to purchase their flats for HK$800,000 to HK$1 million. This measure aims to enable low-income families to acquire property assets, improve the use of public housing resources, and enhance the efficiency of unit allocation. 

The Federation of Trade Unions (FTU) has reiterated its call for a youth home ownership savings plan, targeting individuals aged 21 to 40. This plan would link savings to government bonds or funds, allowing participants to make regular contributions over an eight-year period. Upon completion, participants would have sufficient savings for a down payment and priority in property selection.

The Business and Professionals Alliance for Hong Kong (BPA) has also renewed its proposal for the MPF “first-time homebuyers scheme.” This initiative would allow young people to use their MPF contributions as down payments or mortgage repayments. Additionally, they suggest waiving stamp duty for first-time buyers aged 40 or below and introducing a mandatory savings rental system within youth dormitories to help young people build funds for future property purchases.

If the government adopts the proposal to lower the stamp duty for properties priced at HK$6 million or below to just HK$100, it could significantly stimulate the market. Currently, purchasing a HK$6 million property requires a stamp duty of 2.25%, or HK$135,000. Reducing this to HK$100 would drastically lower upfront costs, making homeownership much more accessible.

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