HK Eases Mortgage Rules, Cuts Liquor Tax

Hong Kong will ease mortgage rules on homes and slash the tax on spirits as the government aims to stimulate an economy affected by China’s slowdown, Kiuyan Wong and Shirley Zhao reported for Bloomberg News.

The maximum loan-to-value ratio for properties will be set at 70% for all homes.

The maximum loan-to-value ratio for properties will be set at 70% for all homes, according to the city’s leader, John Lee, who announced the measure during his annual policy address.

He also expanded an investment immigration program to include homes as qualified assets.

Home prices have dropped to an eight-year low due to declining demand from mainland Chinese buyers and high borrowing costs. Analysts did not expect the measures to significantly impact the market, which is facing a 20-year-high backlog of unsold properties.

“Both measures are expected to boost transaction volumes, especially for new residential projects, but are not strong enough to reverse the downward trend,” said Joseph Tsang, chairman of JLL in Hong Kong.

To help stimulate nightlife, Hong Kong reduced the duty on imported liquor priced above HK$200 ($26) to 10% from 100%, one of the highest rates in the world.

The move is the latest attempt by the government to boost sales for restaurants, bars, and retailers struggling due to a decline in tourists post-COVID and slower domestic spending.