"Big Banks" JP Morgan: Surprised but not worried about the Hong Kong government's increase of over HKD 100 million in luxury property stamp duty, describing it as a redistribution fiscal policy

JP Morgan published a research report indicating surprise at the increase in stamp duty rates for properties valued over HKD 100 million in the 2026/27 fiscal budget. Although the headline appears negative, the bank stated that it is not overly concerned, as this will only affect 0.3% of transactions, with only 169 transactions exceeding HKD 100 million in 2025; from the perspective of ultra-wealthy homebuyers, the additional cost (2.25%) may be negligible, as rising property prices in just one or two months could cover this cost; the aim of this policy is not to suppress the real estate market, but rather to serve as a redistributive fiscal policy, taxing the ultra-wealthy to subsidize low-income groups.

The bank noted that, in fact, this could even trigger a stronger "fear of missing out" (FOMO) sentiment, especially among buyers purchasing properties valued between HKD 50 million and HKD 99 million, who may worry about having to pay higher stamp duties in the future. The bank stated that after the news was announced, the sector corrected by 1% to 2%, and it believes this is more like an excuse for profit-taking after a strong performance year-to-date.

The bank indicated that the most favored developers currently include Sun Hung Kai Properties (00016.HK), Henderson Land Development (00012.HK), and Sino Land (00083.HK); rental stocks include Hang Lung Properties (00101.HK) and Swire Properties (01972.HK)