WEDNESDAY, JUNE 7, 1978
14
SPECULATION ON INITIAL DEPOSITS ON FLATS
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THE GOVERNMENT IS AWARE THAT THERE IS SPECULATION ON INITIAL DEPOSITS WHEREBY INDIVIDUALS, FOR A RELATIVELY SMALL OUTLAY, ARE ABLE TC BOOK A FLAT WHILE THE SALE AND PURCHASE AGREEMENT IS BEING DRA.... UP AND MEANWHILE TO SELL THIS BOOK ING+ AT A PROFIT BEFORE THEY ARE REQUIRED TO PAY THE BALANCE OF THE FIRST INSTALMENT OF THE PURCHASE PRICE.
THIS WAS STATED IN THE LEGISLATIVE COUNCIL TODAY BY THE ACTING FINANCIAL SECRETARY, THE HON. DAVID JORDAN, IN REPLY TO A QUESTION FROM THE HON. LYDIA DUNN.
BUT, HE SAID AT PRESENT THE GOVERNMENT HAS NO POWERS TO CONTROL THIS PRACTICE.
+ IT IS ONE OF A NUMBER OF SPECULATIVE ACTIVITIES IN THE DOMESTIC PROPERTY MARKET WHICH REFLECT THE CURRENT IMBALANCE BETWEEN THE SUPPLY AND DEMAND FOR DOMESTIC ACCOMMODATION, HE SAID.
MR. JORDAN EMPHASISED THAT THE GOVERNMENT IS MONITORING THE PROPERTY MARKET TO ENSURE THAT IT HAS ADEQUATE WARNING IF THE SPECULATIVE ACTIVITIES IN THE MARKET APPEAR TO BE DAMAGING TO THE ECONOMY OR TO THE SUPPLY OF DOMESTIC ACCOMMODATION.
ON SECOND PART OF HER QUESTION, MR. JORDAN SAID THE FACT OF THE MATTER IS THAT THE RECEIPTS TO WHICH MISS DUNN REFERRED ARE NOT DUTIABLE DOCUMENTS.
+APART FROM THE ENFORCEMENT PROBLEMS INVOLVED IN COLLECTING THE STAMP DUTY IF SUCH DOCUMENTS WERE 'ADE DUTIABLE, THE RATE OF DUTY WOULD HAVE TO BE VERY HIGH TO ACT AS A DETERRENT TO SPECULATION, + HE SAID.
REPLYING TO ANOTHER QUESTION FROM MISS DUNN, MR. JORDAN SAID IT WOULD BE INAPPROPRIATE TO COMBAT SPECULATION IN THE PROPERTY MARKET BY SUBSTANTIALLY INCREASING THE STAMP DUTY PAYAELE ON THE TRANSFER OF PURCHASE AND SALE AGREEMENTS.
MR. JORDAN SAID THAT ALTHOUGH, IN PRINCIPLE, A DUTIABLE DOCUMENT COULD BE MADE A NECESSAFY PART OF THE TRANSFER OF A SALE AND PURCHASE AGREEMENT, THE STEP WOULD BE SUBJECT TO THE SAME DRAW- BACKS AS REGARDS ENFORCEMENT AS IN THE CASE OF SALES OF +BOOK INGS+, CR INITIAL DEPOSIT RECEIPTS.
HE POINTED OUT THAT AS REGARDS HAVING AN ESPECIALLY HIGH RATE CF STAMP DUTY BOTH ON TRANSFERS OF SALE AND PURCHASE AGREEMENTS AND ON RESALES WITHIN TWO OR THREE YEARS, THE SAME PROBLEM, OVER THE VERY HIGH RATES REQUIRED TO DETER SPECULATION AND THE IR UNFAIRNESS TO THOSE WITH GENUINE REASONS FOR SELLING, WOULD MAKE THE STAMP DUTY AD + INAPPROPRIATE INSTRUMENT+ WITH WHICH TO COMEAT SPECULATION.
/+IN ANY CASE,