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

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

New York Weekend Edition /
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

arrow_forward_ios
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
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
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
From left: 909 Third Avenue, 79 Fifth Avenue, 240 West 37th Street and 27 East 62nd Street (VNO, Cercone Exterior Restoration, Google Maps)
These were the largest Manhattan real estate loans in April
These were the largest Manhattan real estate loans in April
Hong Kong rent has toppled over in the past year. (Getty)
Rents declined on most Asia-Pacific retail strips last year
Rents declined on most Asia-Pacific retail strips last year
C-PACE gives landlords and developers cheap financing in exchange for making energy efficient improvements. (Getty)
Landlords can now retroactively tap financing tool for energy improvements
Landlords can now retroactively tap financing tool for energy improvements
11 East 26th Street with Henry and Justin Elghanayan (Google Maps, Getty)
Rockrose investment values Nomad office building at $235M
Rockrose investment values Nomad office building at $235M
Jamie Dimon, Steve Roth, Donald Trump and 555 California St. (Trump, Getty)
Vornado lines up $1.2B refi of SF tower co-owned with Trump
Vornado lines up $1.2B refi of SF tower co-owned with Trump
Ron Perelman and 35-39 East 62nd Street (Getty, Google Maps)
Big discounts on sale of Perelman properties and loans
Big discounts on sale of Perelman properties and loans
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...