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Bloomberg
A local buyer has purchased a mansion overlooking Hong Kong’s exclusive Repulse Bay using a method allowing him to avoid property taxes.
The house may have fetched about HK$670 million ($86 million), based on the average square-foot valuation of similar properties in the Headland Road neighborhood, according to the agent that brokered the deal. Raymond Ho, deputy senior director of Residential Development and Investment at property agent Savills Plc, declined to give the exact price of the 7,891 square-foot mansion at 12 Headland Road, or the identity of the buyer, citing client confidentiality.
The property was acquired through the transfer of shares of an offshore company in whose name the property is registered, enabling the deal to go through without paying any local taxes, according to Ho. He said it was bought by “an experienced buyer from Hong Kong†who is not a property developer. Ho said he did not know what the buyer plans to do with the mansion.
The sale is the latest example of how Hong Kong’s wealthy are finding legal ways around restrictions to cool surging property prices in the world’s least affordable city. Hong Kong’s leaders in November announced new measures that raise the base stamp duty to 15 percent for all but first-time local homebuyers. Under Hong Kong’s rules, though, buyers purchasing property through a shell company registered offshore don’t have to pay any taxes.
In 2011, more than half of Hong Kong’s homes worth more than HK$20 million were sold via companies, according to government data.