Exemptions for extra stamp duty proposed

Friday, April 22, 2011
Issue 1291, Page 6
Word count: 540
Published in: Macau Daily Times

By Poyi (Natalie) Leung

The 20 percent special stamp duty to be applied on certain real estate transactions will be exempt if the property is transferred between spouses or family members, or if it’s due to court declared bankruptcy.

The work group promoting sustainable development in the real estate market announced in a press conference yesterday four new avenues to further curb speculations, increase financial risk management and also to alleviate the formation of a housing bubble for the local residential market.

Chief executive Fernando Chui Sai On previously disclosed two of the measures, the special stamp duty and the tightening of maximum loan-to-value (LTV) ratio for equitable mortgage loans of residential properties under construction, at the Legislative Assembly on Wednesday.

Secretary for Transport and Public Works Lau Si Ion told reporters yesterday the Government will submit a draft law for the special stamp duty to the legislature as soon as possible.

Owners who want to sell a residential unit or property under construction within the first year of buying it will be required to pay an extra tax worth 20 percent of the transaction price. The levy will be reduced to 10 percent if the property is sold in the second year after purchase.

Sales of parking spaces and shops will not be subject to this new stamp duty.

However, exemptions will be given if the property is transferred between spouses, immediate and second generation family members and in-laws; between spouses due to inheritance or divorce; or upon a court judgement as a result of bankruptcy.

Collateral confiscated by financial institutes will also enjoy the exemption, the work group said.

As of yesterday the maximum LTV ratio for mortgage loans granted to Macau residents and non-Macau residents, regardless of property prices, should not exceed 70 percent or 50 percent respectively.

No exemptions are available and the restriction is applicable to all applications under review.

Furthermore, the Land, Public Works and Transport Bureau (DSSOPT) and the Consumer Council will launch a website in May to announce details of the sale of incomplete property such as the quantity and price per square foot, based on information regularly provided by the construction and real estate industries.

The authorities and the industries will also jointly draft a sample sale contract of incomplete property for developers to use.

In the meantime the Financial Service Bureau (DSF) will request developers provide copies of unfinished property sale contracts and buyer’s details to the tax department on a regular basis, as well as to submit a tax certificate when transferring the ownership of unfinished residential units that have already been sold.

According to DSF statistics, the work group said the transaction price of residential units in the entire territory reported an increase of nearly 12 percent to MOP 39,198 per square metre of usable area between October 2010 and February this year.

The work group disclosed that at the end of 2010, 8.6 percent or 16,661 residential units were vacant, a higher proportion than that of neighbouring regions, and one third of them were built prior to 1990.

The two land parcels in Fai Chi Kei which were previously planned for land auctions will now be used to build an estimated 800 two-bedroom public housing units.

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