Hong Kong Seaside Mansion Sold For $86 Mn
In what is being mulled as a way to cool the rising property prices in Hong Kong and finding legal ways to buying property by the wealthy, a seaside mansion was bought by an experienced buyer for HK$670 million or an estimated $86 million. Hong Kong has been listed as one of the least affordable cities in the world.
In fact, in November 2016, the base stamp duty rates were also raised to 15 per cent for first-time local home buyers but, for those buying through a shell company didn't have to pay any such taxes.
Interestingly, in this deal, the property was bought in the name of an offshore company, thus, the buyer saved taxes as high as HK$100.5 million. It is also assumed that the buyer has other properties in the city, too. This means he doesn't qualify as a first-time home buyer.
It is said that the buyer was a local and not a foreigner, because if he was a foreigner who already owns property in Hong Kong and that property moved to the other buyer within six months he would have been liable for 45 per cent tax.
According to experts, buying properties valued above HK$20 million in the name of shell companies has been a way to skirt taxes. In fact, government data shows that more than half of the properties sold in 2011, priced above HK$20 million were bought in the name of companies, but, later in 2013, the government started taxing such companies. The only way to stop this practice, experts suggest, is that the government will have to stop individuals from buying properties in the name of companies.
Here are some facts about the property sold:
- The property is located at Repulse Bay in Hong Kong
- It is spread in an area of 7,891 sq ft