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The Bill seeks to adjust the exemption level for estate duty and the thresholds of the marginal tax bands, as proposed in the 1997-98 Budget, which Members have recently debated. Specifically, the Bill seeks to increase the estate duty exemption level from $6.5 million to $7 million. Estate duty will be payable at 6 per cent on estates of values between $7 million and $8.5 million, 12 per cent on estates of values between $8.5 million and $10 million, and 18 per cent in respect of estates of values over $10 million.

Mr President, with these remarks, I commend the Bill to Members.

End

Stamp Duty (Amendment) Bill 1997

Following is the speech by the acting Secretary for the Treasury, Mr Kevin Ho, in moving the second reading of the Stamp Duty (Amendment) Bill 1997 in the Legislative Council today (Wednesday):

Mr President,

I move that the Stamp Duty (Amendment) Bill 1997 be read the second time.

We made adjustments to stamp duty on property transactions in the 1996-97 Budget in order to benefit buyers of lower to medium-value flats. Increases in property prices have eroded this concession since the last Budget. To continue with our commitment to encourage home ownership, the Financial Secretary has proposed in the 1997-98 Budget to restore the effect of the concession by adjusting the threshold values for the various stamp duty bands in order to benefit those buying flats with values up to $4 million. This Bill seeks to put the proposal into effect, following Members' debate on the Budget.

Specifically, the Bill seeks to increase the limit of property value below which only the nominal stamp duty of $100 is charged, from $750,000 to $1 million. The rate of 0.75 per cent will apply to properties with values of $1 million to $2 million; the rate of 1.5 per cent will apply to properties with values of $2 million to $3 million; the rate of 2 per cent will apply to properties with values of $3 million to $4 million; and the threshold at which the maximum rate of 2.75 per cent begins to apply will be raised from $3.5 million to $4 million.