MEMORANDUM FOR EXECUTIVE COUNCIL
STAMP (AMENDMENT) (NO 4) BILL 1978 HKK 360/3
360/3
RECEIVED IN RICWIT NO. 51
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5 MAY 173
Annexed for the consideration of Honourable Members
is the Stamp (Amendment) (No 4) Bill 1978.
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Under section 40(4)(e) of the Stamp Ordinance (Chapter 117), all instruments executed by the Housing Authority for the purposes of the Housing Ordinance (Chapter 283) are wholly exempt from stamp duty. The instruments in question are, in the main, leases of the Authority's domestic and non-domestic premises. Both parties to a lease are legally liable to pay the stamp duty on it but by convention each pays one half. It was decided in 1973 when the Authority was reconstituted that the net revenue to be derived by way of stamp duty, mostly in very small amounts, on the Authority's many leases, was not worth the complexities of administration.
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(2)
On 11th April 1978, having considered XCC(78)28, Honourable Members advised and the Governor directed that the Housing (Amendment) (No 2) Bill 1978 should be introduced into the Legislative Council. Among the new powers to be given to the Authority under that bill is the power - given by new section 17A - to sell flats on terms and conditions determined by the Authority with the prior approval of the Governor.
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Under the Stamp Ordinance, both parties to the conveyance on sale of a flat are legally liable to pay the stamp duty on it but the convention is that the purchaser pays the duty as a condition of the sale. Honourable Members will recall that flat purchasers under the Home Ownership Scheme will get sale prices and mortgage terms better than those on the open market. It is not considered that they should have the further benefit of not paying stamp duty which any other purchaser on concessionary terms would have to pay. The ad valorem stamp duty for flats built under Phase I of the Home Owner- ship Scheme will in that event be payable not on the price but on the assessed market value, which will be higher, and is likely to range from $1, 100 to $7,400 per flat. The fact that there will be restrictions on resale will be one of the factors to be allowed for in the valuation.
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The Stamp (Amendment) (No 4) Bill 1978 accordingly seeks to amend the principal Ordinance so that conveyances on sale executed
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