The recovery of the local property market, alongside the upturn in Macau's gaming revenue recorded since late 2016, has motivated the Macau SAR government to prepare, and submit for Legislative Council (LegCo) approval, some control measures to introduce more transparency and to increase the number of residential properties in the market.
On August 10 2017, the legislators approved Law 13/2017, which introduced some amendments to the lease regime. The most important change was the provision of mandatory certification of the parties' signatures in a lease contract, which eased the collection of the applicable stamp duty and property tax. Legislators failed, however, to agree on criteria to protect the tenants against vast increases in their rental fees.
Two other bills were approved by the LegCo in early February 2018, one to amend the property tax regulation (Law 1/2018), and the other to create a special stamp duty due upon the acquisition of a second, or further residential units (Law 2/2018).
Law 1/2018 has put an end to the exemption of property tax previously applicable to vacant properties. Respective owners will now be subject to the payment of a six percent tax, hence it is expected that some will release properties into the market in order to cover the increased taxation.
With Law 2/2018, investors will be subject to the payment of a five percent stamp duty tax on the purchase of a second residential property, and 10% on subsequent properties purchased after that. However, there is room in the law to recover the amounts paid on account of the new tax.
Meanwhile, the Monetary Authority of Macau has eased the loan-to-value limits for young adult buyers who qualify as first-time homebuyers, for the purposes of them applying for mortgage loans.
The effectiveness of these rules is yet to be proved by the market, and it is certain that the Macau people will demand further intervention from the government.
|João Nuno Riquito||Bruno Almeida|