Unity Fund: It is expected that the new "Policy Address" will reduce the stamp duty on residential properties in Hong Kong.

The Hong Kong government will release a new Policy Address on Wednesday (September 17th). Ye Wenqi, Vice President of Unity Hong Kong Fund and Executive Director of the Public Policy Research Institute, expects that the Address may mention the possibility of reducing the stamp duty rates for residential properties, which could encourage more citizens to enter the market without necessarily causing a significant impact on the government's finances, and may even increase fiscal revenue. The market is watching to see if the government will relax the threshold of the HK$100 stamp duty for residential properties. Ye Wenqi stated that it is currently unpredictable because this move would result in an annual loss of over HK$1 billion for the government. If the HK$100 stamp duty threshold for property value is raised to HK$6 million, it could help reduce the burden on first-time homebuyers, stimulate liquidity in the medium-sized unit market, and potentially activate a wider secondary market through "chain sales." However, it would be a huge challenge to offset the tax revenue loss of a HK$6 million transaction by facilitating over 1300 HK$100 transactions. He analyzed that the real potential benefits would come from "chain sales" and the "economic multiplier effect." However, it depends on whether the market can react positively to this. If sellers cash out and buy more expensive units, it would lead to substantial tax revenue in chain transactions, driving economic activity in the industry chain and converting into additional indirect income such as capital gains tax and salary tax. He believes that relaxing the property thresholds or investment quotas under the new Capital Investment Entrant Scheme (Investment Immigration) may not necessarily bring significant benefits. While it could reduce investment costs and attract more investors, it would directly reduce government revenue and increase demand for medium-priced properties, accelerating the turnover of medium-priced properties in the market, thus impacting citizens looking to move.