With regard to the bill lowering the transaction tax - which has been sent to the Legislative Assembly for passage - real estate associations and chambers of commerce recently said that government policies should be people-oriented, with all of them expressing the desire for a standard tax rate. They further suggest that a nominal charge of MOP100 should be applied to properties worth less than $2m. to help lower income homebuyers.

The property transaction tax currently levied in Mainland China and Hong Kong is relatively lower than that of Macao. In China, the tax rate for low and medium-priced properties of less than 144 m² is 1.5% while high-priced properties larger than 144 m² are levied at 3% of the property price. In Hong Kong, the tax rate for properties valued at less than HK$3m. is 1.5%, 3% for those below HK$6m., and only 3.75% for properties above HK$6.72m. A nominal HK$100 is charged for properties valued at less than HK$2 million.

Chong Sio Kin, President of Macau General Association of Real Estate, expressed his support for the government’s plan to implement a standard stamp duty of 1%, which should help people with a lower income own flats. He further suggests a nominal charge of MOP100 for properties priced less than MOP2 million.

Macao’s homebuyers currently have to pay five different types of tax in a property transaction (i.e.) transaction tax, stamp duty, notarisation fee, registration fee and mortgage registration fee. By adding up these complex figures, the total tax rate amounts to 4.95%, which is higher and more complicated than the standard rate of tax of 1.5% in Mainland China and Hong Kong.

Ng Lee Fan, President of the Association of Real Estate Development of Macau, believes that a nominal charge of between MOP100-150 should be applied to property transactions of less than MOP2m., while the tax rate for property transactions exceeding MOP2 m. should be lowered to 1%. He also believes that the preferential tax rate scheme would indeed help revitalise the real estate market. He further suggests that the government combine transaction, notarisation, registration and mortgage registration fees into a single charge adjusted to 0.5% of the transaction price so that property investment can be relieved of high taxes.

Ung Choi Kun, Standing Vice-President of the Association of Property Agents and Realty Developers of Macau, believes that homebuyers in Macao are still burdened with complicated procedures and expensive notarisation and mortgage registration fees. He thinks that the relevant departments should keep pace with the times and be in tune with government policies to lower, simplify and devise a standard and reasonable tax rate in order to achieve the goal of people-orientation.