HK’s tax on unsold property makes a “sitting duck” out of luxury developers

“It is rather unfair for high-end luxury properties.”

Aug.August 05, 2018 03:00 PM

(Credit: Estial, Pixabay, Max Pixel)

In an effort to add supply to Hong Kong’s tight housing market, the government has imposed a tax on developers holding unsold properties for more than six months.

Luxury developers are calling foul play, according to Bloomberg, saying the tax burden disproportionately hits them, as they claim it takes longer to find buyers ready to spend serious money.

“We are in a sense, a sitting duck,” chairman of Hang Lung Properties Ltd. Ronnie Chan told Bloomberg. One of Chan’s projects, Blue Pool Road, has 18 houses listed for more than $25 million. Since the properties went on the market in 2016, only 6 have been sold.

“If there had been 18 buyers in the past three years I would have sold all of them,” Chan added.

But Bloomberg Intelligence property analyst Patrick Wong disagreed with Chan’s assessment that a shortage of buyers was the issue: “Developers of ultra luxury properties hold onto them as long as possible. They keep them until they find a buyer offering a really high price.” [Bloomberg]

Related Articles

With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

WeWork co-CEOs Artie Minson and Sebastian Gunningham

WeWork under pressure as losses soar to $1.25B

195 Broadway and L&L Holding's David Levinson and Robert Lapidus (Credit: Google Maps and L&L Holding)

L&L, Safehold lock in $592M in financing for Downtown building

Tore Steen, CEO of CrowdStreet (Credit: iStock)

CrowdStreet lands $12M in financing, hires execs

A rendering of the The Epic in Dallas, Texas and Westdale CEO Joe Beard (Credit: Westdale, Wikipedia)

No panic: Westdale mulls $50M Series B bond raise in Tel Aviv

(Credit: iStock)

S&P hits another record, but real estate stocks don’t follow suit

Joel Schreiber (Credit: Shir Stein and Wikipedia)

WeWork’s first investor used his stock as collateral. Now his lenders are suing him