TNAG-1766-FCO40-2520-Hong-Kong-Budget-Appropriation-Ordinance-1988-(No.-23-of-198-1988 — Page 76

Property

tax,

interest tax and profits tax paid by unincorporated businesses

97.

The reduction proposed in the standard rate from 1618

to 15% will lower the yields from property tax, interest tax

and profits tax paid by unincorporated businesses. Taken together, I estimate that this will cost a further $70 million

in 1988-89 and $160 million in a full year. The new standard rate will apply to provisional and final profits

property tax assessments for 1988-89; it will apply also final interest tax assessments for that year.

Stamp duty

98.

tax and

to

I have a further concession; it relates to stamp

duty. The concession is designed to facilitate wider home ownership and assist the middle income group. At present, the

rate of duty payable on assignments varies according to the sale

price or market value of the property, whichever is the higher. I intend to relax the rates applicable to small and medium-sized

properties.

99.

I propose with effect from 1 April 1988 to lift the

threshold at which the 2.75%

2.75% rate begins to apply from the

present $500,000 to $1.5 million; to cut the rate of duty for

properties costing between $250,000 and $1.5 million; and to

introduce a new formula for determining marginal relief, which will provide a greater benefit to duty payers and have the effect of pushing the various duty rate thresholds upward. I

estimate that some 100,000 persons will benefit from these proposals, which will cost a further $300 million in 1988-89.

Details are given in an Appendix to the printed version of this

speech (47).

(47) Appendix F(4).

/Air