Property Hunter Magazine Issue 63- February 2015 | Page 61

Knight Frank Asia-Pacific Residential Review January 2015
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K

Providing a complete
view of the major taxes
incurred when buying,
holding and selling a
residential property, the
report analyses the costs
of residential investment
in Asia-Pacific.
COMPARING TAX BURDENS
ACROSS ASIA-PACIFIC
Using a hypothetical residential
investment scenario, the report
investigates the tax liabilities
borne by cross-border investors
in the region – the focus is on
the eight markets in Asia-Pacific
that allow foreigners to invest
more liberally, without residence
requirements in particular.

there is also a need to understand
potential liabilities. One of the most
significant of these is undoubtedly
tax. Be it a tax on acquisition,
holding or exit, returns on all
residential property investments
are impacted.”

in the region, with Cambodia
having some of the lowest. Not
only are these two markets more
expensive than the other markets,
foreign investors have to shoulder a
significantly heavier tax burden than
their local counterparts.

Holt adds, “Helping balance the
books has not been the only
motivation for the introduction
of new taxes when it comes to
property. As a macro-prudential
tool, taxes have been introduced to
cool residential markets – markets
ironically buoyed by stimulus
measures and the low interest rate
environment we have seen since
2009. The strong price growth
in a number of these markets
has led to numerous rounds of
interventions by policy makers as
they look to address the issues of
affordability and household debt,
with tax being one of the key tools
at their disposal.”

The disparity between tax burden
on foreign and local investors is
explained by:

KEY FINDINGS
1.

Mr Nicholas Holt, Head of Research
for Asia Pacific, says, “Total returns
are not the sole concern of
investors looking at real estate;

Markets like Cambodia, Japan,
Malaysia and South Korea do
not impose an investment
premium on either local or
foreign buyers.

3.

night Frank Asia Pacific, the
independent global property
consultancy has launched its
Asia-Pacific Residential Review for
January 2015.

Some markets effectively
charge an “investment
premium”, essentially the
additional tax a purchaser
would pay on the property as
an investor as compared to
self-use. The premium also
varies between foreign and
local buyers.

•

Latest report on Asia Pacific residential investment scenario

Investment Premium

Regional snapshot on price
growth

•

Australia and New Zealand
continue to see solid price
growth, sentiment improved
in India, while China and
Singapore continue to see
prices slide.

•

Five out of the 10 mainstream
residential markets in AsiaPacific saw prices increase in
Q3 2014, as reported in Knight
Frank Global House Price Index.

Australia: A higher income tax*
imposed on foreigners
Hong Kong: A cooling measure
of 15% Buyer’s Stamp Duty on
foreigners
Malaysia: A combination of higher
income tax* and cooling measure
of higher Real Property Gains Tax
imposed on foreigners
Singapore: A combination of higher
income tax* and cooling measure
of 15% Additional Buyer’s Stamp
Duty imposed on foreigners
* Pleas