PLC Paper No. LS 40
Paper for the
House Committee Meeting
of the Provisional Legislative Council on
24 October 1997Legal Service Division Report on
Resolution under section 29I(2) of the
Stamp Duty Ordinance (Cap. 117)
The Secretary for the Treasury has given notice to move the above motion at the meeting of the Council on 5 November 1997.
2.The purpose of the motion is to extend the provisions for charging stamp duty on all agreements for sale and purchase of residential property by a further period of two years until 31 December 1999.
3.The provisions for charging stamp duty on agreements for sale and purchase of residential property were first introduced in the Stamp Duty (Amendment) Ordinance 1992 as one of the measures to help dampen speculation on residential property. The validity of these provisions is subject to a specified date of expiry, currently provided as midnight on 31 December 1997. Under section 29I(2) of the Stamp Duty Ordinance (Cap. 117), the Legislative Council may by resolution substitute that date by another date. Such substitution had been made on two occasions in November 1993 and December 1995.
4. In April 1996, the Administration introduced the Stamp Duty (Amendment) (No. 2) Bill 1996 into the Legislative Council seeking to make the provisions permanent. However, Second Reading debate of the Bill was not resumed and it lapsed after 30 June 1997.
5.The Administration is of the view that it would be prudent to move a motion first to extend the validity of the provisions by another two years and introduce an amendment to the Ordinance to make the provisions permanent when the first Special Administrative Region Legislative Council is in place.
6.In the Provisional Legislative Council Brief (File ref. FIN CR 6/2306/91 Pt. 12), the Administration explained that the provisions have remained in force for nearly six years and have been accepted by the community at large. If the provisions were allowed to lapse after 31 December 1997, there would be a real risk that speculative activities would be fuelled. Members may refer to the Brief issued by the Finance Bureau in October 1997 for more details and background information.
7. The draft resolution is in order from the legal point of view.
Ho Ying-chu, Anita
Assistant Legal Adviser
Provisional Legislative Council Secretariat
21 October 1997