China liaison office increases its HK property portfolio to more than 280 flats after its latest purchase

27-Feb-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

The Chinese government’s liaison office in Hong Kong, which is exempted from stamp duties, has increased its property portfolio in the city to more than 280 flats, following its latest acquisition of 20 apartment units in Kwun Tong.

The office, using an investment vehicle called Newman Investment, had paid HK$247.53 million (US$31.54 million) for 20 flats at the Grand Central complex, a venture between Sino Land and the Urban Renewal Authority, according to the Land Registry’s data.

All five Newman directorsChen Dunzhou, Chen Zhibin, Li Wenze, Liang Xiong and Sun Zhongxinare officials from the Administration and Finance Department of the Chinese government’s liaison office in Hong Kong.

Nineteen of the flats are two-bedroom layouts from 522 to 607 sq ft. Newman has paid a 5 per cent deposit on the flats.

According to the Stamp Duty Ordinance, the central government, or any “incorporated public officer or any person acting in his capacity as a public officer shall not be liable for the payment of stamp duty”.

The rule means Newman is exempt from stamp duty of 30 per cent a 15 per cent buyers’ tax charged on homes purchased by companies and another 15 per cent levy on the purchase of second homes which adds up to savings of as much as HK$74.3 million on the purchases, according to Kenneth Leung, the lawmaker in accountancy.

Lilian Chiang, senior partner at law firm Deacons, said Newman should pay the extra stamp duties because it was a private limited company and not on the list of exempted people or institutions.

The liaison office declined to comment when contacted by the Post.

Among its purchases, the office bought all 48 flats at Parkcrest in Sai Ying Pun, for HK$480 million in January 2015 from Henderson Land Development.

Leung said the government should ask the liaison office why it has bought so many properties.

“Their staff may live in there, [but] does it really have so many employees? Why do the employees not rent instead?” Leung said.

“If it buys 1,000 or even 10,000 flats, should the stamp duties still be exempted? Is there investment activity involved? If so, it is eligible for exemption of stamp duties,” he said.

Chung Kim-wah, assistant professor of the Department of Applied Social Sciences at Hong Kong Polytechnic University, said the liaison office should be more transparent about what businesses it is engaged in and what other subsidiary companies it controls. “It is enjoying the concession offered by Hongkongers, who have lost millions in taxes from these deals,” Chung said, adding government bodies should be transparent.

https://sg.news.yahoo.com/china-liaison-office-increases-hong-004750276.html

 


Category: Hong Kong

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