, Columnist
Hong Kong Derails Property Streetcar
Higher property taxes now avoid more pain later, for owners and banks.
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When pro-market authorities tamper with prices to cool asset bubbles, economists speak of "throwing sand in the wheels of finance." Having emptied its bucket of sand without stanching the desire to own property, Hong Kong decided to derail the out-of-control streetcar in a pit of exorbitant taxation. Considering the more painful alternative, it's a wise move.
Now that foreigners, including all-important mainland Chinese buyers, must pay a 30 percent stamp duty1478483847911 to buy overpriced shoeboxes, transactions could drop by 70 percent, Bloomberg News reported. Weaker demand might jolt earnings of the city's developers. That's what the biggest drop in 16 months in Cheung Kong Property Holdings Ltd.'s shares suggested Monday.