(Bloomberg) -- The Hong Kong government is considering suspending a plan that would have introduced a vacancy tax on new housing stock, the Transport and Housing Bureau said.
The reconsideration was prompted by community feedback and the state of the economy, a bureau spokesperson said. Hong Kong has been battered by last year's anti-government protests and the coronavirus pandemic, with the government forecasting a contraction of as much as 8%.
The move to squash the tax would be a relief for property developers, who would have been subject to a hefty tax and jail time if they failed to sell new apartments. Hong Kong had 44,890 vacant new homes as of late 2019, representing 3.7% of the city's total stock, and a decrease from 2018's 4.3%, according to government data.
The plan to tax vacant new homes was among Carrie Lam's proposed policies to tackle the city's sky-high property prices in 2018. However, the bill has yet to pass in the legislative council, which went through months of suspension due to last year's protests.
Despite a recession, homes sales in Hong Kong remain buoyant. A new residential project with accessible transportation was oversubscribed by more than 50 times this week, making it one of the most popular apartment sales in the city in over a decade.
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