HONG KONG will raise stamp duties on property transactions for the first time in three years, the latest effort to check an overheated property market buoyed by capital inflows from the Chinese mainland.

    Hong Kong’s real estate is among the most expensive in the world and property experts have forecast that home prices will rise further this year. Skyrocketing property prices have added to growing discontent in the city, with its population already under strain from high living costs and a widening wealth gap.

    The government will raise stamp duties on home purchases to 15 percent, across the board, effective Nov. 5, to dampen a red-hot market which has failed to respond to a raft of measures taken by policymakers in recent months.

    “We expect the measure to have an immediate and effective cooling impact,” Financial Secretary John Tsang told a news conference.

    First time local homebuyers will be exempt from the latest policy tightening measures with stamp duty ranges remaining from 1.5 percent to 4.25 percent depending on the value, officials said.

    Hong Kong home prices surged in September for the sixth consecutive month to hit the highest level in nearly a year, government data showed last Monday.

    Soaring property prices this year are in stark contrast to the slowdown in the overall economy, as evident from flagging retail sales and slowing economic growth, and industry officials said renewed mainland purchases had been a key factor behind the rise to escape a depreciating yuan currency.

    Chinese mainland investment into Hong Kong properties perked up in recent months both in the primary and the residential market after showing sluggish growth most of last year, according to data from Midland Realty, a real estate agency.

    But property analysts expect the measures to have limited impact on prices in the short term.

    “Under the current new policy, in the next two months we can expect the transaction volume to drop 20 to 30 percent but this will have limited impact on property prices,” said Thomas Lam, senior director at consultancy, Knight Frank.(SD-Agencies)