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I am aware that some Members are concerned about the burden of stamp duty on home buyers. We have examined this matter and consider it appropriate and practical to review the stamp duty rate structure periodically in order to relieve the burden of home buyers. As Members may recall, we reduced stamp duty in 1994 to benefit buyers of flats with value up to $3 million. In this year's Budget, we also propose to further reduce the stamp duty on property transactions to benefit buyers of flats with value up to $3.5 million. This will help those buying at the lower to middle end of the market, including those who purchase Home Ownership flats or Sandwich Class Housing Scheme properties.
Now, let me turn to the second main proposal in the Bill. Adjudication is a process whereby the Collector of Stamp Duty gives an opinion on whether a certain document is chargeable to stamp duty and assesses the amount of stamp duty, if any, chargeable on the instrument. There are two categories of adjudication. Mandatory adjudication is conducted on certain types of instruments for revenue protection purposes while voluntary adjudication is one which is requested by an applicant of his own volition. At present, a nominal fee is charged by the Inland Revenue Department on an adjudication service, regardless of whether it is a mandatory or voluntary one.
The Director of Audit completed an audit review of the adjudication services in early 1995 and recommended that the adjudication fee should be charged on a full cost recovery basis. Having reviewed the matter we concluded that a distinction should be drawn between mandatory and voluntary adjudication, and that mandatory adjudication, which is conducted primarily for revenue protection purposes, should be provided free of charge while a full cost fee should be charged only for the provision of voluntary adjudication service. Our approach was endorsed by the Public Accounts Committee. We therefore propose to amend the Ordinance to implement this limited charging proposal.
The opportunity is also taken in this amendment exercise to transfer from the Governor in Council powers in the Ordinance which will not involve major policy considerations to the Secretary for the Treasury in order to lessen the burden of the Governor in Council. Any such exercise of power would still of course be subject to the scrutiny of this Council in the usual way.
Mr President, with these remarks, I commend the Bill to Members.
End