Tycoon Developer Ronnie Chan Says Hong Kong Vacancy Tax Is Unfair

(Bloomberg) -- Hong Kong’s decision to tax developers who hold unsold properties will fall disproportionately on builders of ultra-luxury apartments, which take longer to sell, said Ronnie Chan, chairman of Hang Lung Properties Ltd.

“We are in a sense, a sitting duck,” said Chan, referring to the Hang Lung’s Blue Pool Road development where houses cost more than HK$200 million ($25 million). “It is rather unfair for high-end luxury properties.”

Hong Kong Chief Executive Carrie Lam this month announced a levy on new units left unsold for more than six months as a part of a broader effort to boost supply in the world’s least affordable property market. The aim is to make it more expensive for developers to hoard properties instead of selling them.

Only six of the 18 houses at the Hang Lung project have sold since they first went on the market in 2016, with the most recent changing hands in March for HK$328 million, according to the Hong Kong land registry. “If there had been 18 buyers in the past three years I would have sold all of them,” Chan said.

Patrick Wong, a property analyst at Bloomberg Intelligence, said that’s not always the case.

“Developers of ultra luxury properties hold onto them as long as possible," Wong said. “They keep them until they find a buyer offering a really high price.”

©2018 Bloomberg L.P.