(Bloomberg) -- Hong Kong's government unveiled details of a planned tax on unsold new apartments, including the potential for jail time for developers who defy the rules.
Developers will be required to submit reports annually on the status of apartments, with false statements punishable by a fine and a year in prison, a document submitted to the legislature late Tuesday proposed.
Notorious as the world's least affordable housing market, Hong Kong's aim is to boost the supply of homes, a move that could help to curb price pressures. Builders would be more likely to sell apartments quickly rather than stockpiling them in the hope of price gains and bigger profits in the future.
Under the plan, a tax amounting to double an apartment's annual rental value would apply after six months of vacancy. The proposal also plugs a loophole: developers can't beat the tax simply by selling a new apartment to an associated company.
The government plans to introduce a bill containing the measures before the end of the legislative year in July.
To contact the reporter on this story: Shawna Kwan in Hong Kong at wkwan35@bloomberg.net
To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Paul Panckhurst
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