As countries which have lived beyond their means through excessive spending attempt to print their way out of economic trouble, they have created a huge supply liquidity in global markets. Higher asset prices and inflation have been predictable consequences. In the case of some property markets, we have also seen a relentless surge in demand for real assets from the growing number of PRC HNWIs. Hong Kong's property market has surged as a result, making housing less affordable for local residents.
The government's previous attempts to cool the market through tighter borrowing restrictions and a special stamp duty on owners who resold within two years of purchase failed to stop prices from increasing (and may have actually contributed to subsequent increases). Higher deposit requirements certainly made housing less affordable for locals seeking to get on to the property ladder.
The latest measures increase and extend the special stamp duty to cover sales made within three years from the date of purchase. This will achieve nothing except reducing the supply in the secondary market. Given that the effect of the original special stamp duty was much the same and has been widely commented on, the government must know this which leaves figuring out why they did something which is widely known to have the opposite effect from what the government claim as an exercise for conspiracy theorists.
The 15% tax on buyers who are not Hong Kong permanent residents is one of the few times that Hong Kong has openly discriminated againts foreign buyers (investments in broadcasting telecommunications and the loyalty bonus for subscribers in the Tracker (HK:2800) IPO being others). It is clearly targeted at PRC buyers who have made their presence felt in the local market although it also catches local buyers who buy through a company.
Logic tells me that the 15% foreign buyer tax will deter at least some of the PRC buyers which will be negative both for property prices in general and for developers. On the other hand, they have created a situation were foreign buyers will be less willing to sell their properties. My HK$0.02 worth is that the combined effect of less demand and increased supply (more flats are being built) will, at the very least, take the heat out of the market and may actually result in a dip in prices.
A couple of further thoughts. The first is that the comercial and industrial sectors are running red hot as investors turn to these markets because they are not subject to special stamp duty or foreign ownership taxes. There has already been some bleating about locals being priced out of these markets and how higher rentals make it hard for local businesses (although it is not at all clear how the two are connected). The second is that local buyers will have to buy in their own names instead of through a company - because companies and individuals are taxed on a different basis, this amounts to a tax increase on property investors.