The Government has launched fresh measures to manage Macao’s property market, in order to promote a healthy long-term development of the sector.
They include changes to the rules on stamp duty tax payable on acquisition of second properties and above, and permission for banks to lend – to young Macao residents who are first-time buyers – up to either 80 percent or as much as 90 percent of the agreed value of a property.
An amendment bill relating to existing urban and housing tax regulation, and a bill relating to stamp duty tax for the acquisition of more than one residential property, received second and final readings in the Legislative Assembly on Tuesday (6 February) and Wednesday (7 February), respectively.
They will become effective the day after they are gazetted. The new guidelines for banks regarding mortgage-lending conditions for young Macao residents will be effective at that time also.
One major area of amendment concerning urban and housing tax regulation is cancellation of the exemption status of leased housing with reference to vacant residential property tax. The move is designed to increase the stock of homes available in the rental market by increasing the costs faced by owners should they keep a property empty.
The new stamp duty tax rule applicable on acquisition of a second residential property stipulates homebuyers will be obliged to pay – in addition to existing taxes – a five percent of property value. For acquisition of a third property and above, the additional stamp duty will be 10 percent of property value.
People holding only one property but who wish to dispose of it and acquire a new one as replacement, will be entitled to a refund on the additional five percent stamp duty, provided they register the conveyancing process with the relevant authorities within a year of it occurring.
Conveyance of property between married people or between people with ties of kinship or affinity will also occasion the right to a refund of the additional stamp duty tax, provided the acquiree does not hold more than one residential property in Macao.
The new rules regarding mortgages for eligible first-time homebuyers who are Macao residents, have been formulated by the Monetary Authority of Macao. They apply to those holders of Macao identity cards aged between 21 and 44 (including those that have not yet reached their 45th birthday).
Young residents purchasing a property as a first-time buyer will be able to apply for a mortgage of up to 90 percent on a property valued at or below 3.3 million patacas. Such buyers seeking to acquire a property valued at between 3.3 million patacas and 8 million patacas, will be entitled to apply for a mortgage equal to 80 percent of agreed value.
On pre-sales of unfinished housing units, the mortgage lending ceiling for the eligible group will be 80 percent.
According to the Statistics and Census Service, Macao’s residential property price index increased by nearly 27 percent sequentially from the first quarter of 2016 to the fourth quarter of 2017. Statistics show that more than 40 percent of acquirees of residential property that was conveyed during the abovementioned period were non- first-time buyers and 90 percent of all non- first-time buyers were Macao residents.