Property appeals despite tax
By Hui Ching-hoo and Zhang Jin (China Daily)Updated: 2007-01-20 10:48
HONG KONG: Most Hong Kong-listed property developers surveyed on Friday say China's new land appreciation tax will not seriously hurt their mainland operations and would not slow their pace of investment.
Nearly 90 percent of 26 Hong Kong-listed companies agreed "their level of
mainland real estate investments will not be affected by the tax," according to
a survey conducted by international accountant Deloitte Touche Tohmatsu.
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Most of them said they have confidence in the mainland's real estate sector, while 33 percent said they would increase their investments by more than 100 million yuan.
There are now 118 companies listed in Hong Kong that have property or hotel operations on the mainland.
Some developers said they have already set aside funds to pay the tax because the industry has known it would be introduced one day. It becomes compulsory next month.
Neo-China Group says it has made a 100 million yuan provision for commercial projects in Tianjin.
"The tax is mainly targeting projects with high marginal profit," said Neo-China Vice-President Ronald Chan. "Most of our residential projects are low-end and small size, so the impact is very light on us."
Tam Lai-ling, chief financial officer and deputy managing director of Hopson
Development Holdings, said the company has written off 340 million yuan over the
years so "enforcement of the land apprication tax does not cause a sudden shock
to the company."
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