MACAU GOVERNMENT ANNOUNCES SIGNIFICANT ADJUSTMENTS TO PROPERTY MARKET CONTROL POLICY

In recent years, both industry stakeholders and the general public in Macau have advocated for adjustments to the region’s property market control policy. In response, the government, prior to the 2024 policy address, has announced substantial changes to Macau’s real estate policy. These modifications focus on two main areas: the elimination of the additional 5% stamp duty for second residential property purchases and the dissolution of mortgage percentage benefits and restrictions for local residents in favor of a unified mortgage limit of 70%. Both measures will become effective from January 1, 2024.

The government anticipates that the removal of the second-property purchase tax and the standardization of the maximum mortgage limit across all residences at 70% will aid property owners looking to upgrade or alter their living conditions. Without the imposition of punitive taxes, these homeowners will have improved opportunities to do so. However, the acquisition of a third residential property will still attract an additional 10% tax, encapsulating the government’s stance that two residential properties lie within a reasonable range, but owning a third warrants extra taxation.

The property market will also be significantly impacted by the revision of the property mortgage ratio. Under the new policy, the mortgage ratio of residential properties valued above MOP 8 million can increase from the former 50% to a maximum of 70%. Conversely, the mortgage ratio for first-time buyers will decrease from the range of 80% to 90% to a maximum of 70%. Since the introduction of the firsttime homebuyer policy in 2018, the market has seen a downturn in transactions and prices due to the lower mortgage ratio for properties priced over MOP 8 million, and the burden of additional stamp duty for those already owning properties. The new policy addresses these two factors, leading market commentators to anticipate an improvement in the circumstances for larger units, with expectations for a rebound in transactions and prices.