(Yicai) March 4 -- Hong Kong will raise the stamp duty on residential property transactions above HKD100 million (USD12.8 million) to 6.5 percent from 4.25 percent, a move aimed at boosting fiscal revenue rather than cooling the housing market as prices and transactions continue to recover.

The tax increase targets ultra-luxury homes and affects only 0.3 percent of residential transactions, according to investment bank reports. Market participants said the limited scope means it is unlikely to derail the property market’s rebound, which has gathered pace over the past year.

The Hong Kong government recently announced the adjustment, lifting the rate by 2.25 percentage points. Based on a property priced at HKD100 million, the stamp duty will rise from HKD4.25 million to HKD6.5 million (USD542,300 to USD831,350), an additional cost of more than HKD2 million. JPMorgan Chase said in a research report that it is not concerned about the impact, noting that for ultra-wealthy buyers, the higher levy represents only a marginal increase in overall acquisition costs.

Luxury Segment Leads Market Rebound

Hong Kong’s housing market has been notably active this year. According to Centaline Property, sales of new residential units exceeded 2,400 in January, a 15-month high, and topped 1,300 in February, marking the 13th straight month of more than 1,000 transactions.

Several global banks, including Citigroup, Goldman Sachs, and HSBC, have raised their forecasts for home price growth in 2026. JPMorgan recently revised its projection for this year’s increase to 10 percent to 15 percent from a previous 5 percent to 7 percent, and expects a further gain of about 5 percent in 2027.

“The Hong Kong property market has rebounded by over 5 percent from its recent lows; however, it is still approximately 25 percent down compared to the highs of 2021,” management of local conglomerate New World Development said at a recent earnings conference. They added that anticipated US interest rate cuts, along with strong gains in Hong Kong stocks over the past year, could encourage potential buyers to reallocate profits from equities into real estate, supporting the recovery.

Luxury housing has led the rebound. Data from Centaline Property’s research department show that 262 private residential properties valued at HKD100 million or more were sold in 2025, a record high, with total transactions reaching HKD53.1 billion (USD6.8 billion). In the first two months of 2026, 48 such transactions were recorded, with a total value exceeding HKD10 billion.

Louis Chan Wing-kit, Asia Pacific vice chairman at Centaline Property, said that as the market gradually turns and rents climb, many tenants are reconsidering renting. Goldman Sachs noted that Hong Kong rents rose about 20 percent from 2023 to 2025, and combined with declining mortgage rates, this may prompt more residents to shift from renting to buying.

Editor: Emmi Laine