Executive Councillor Franklin Lam Fan-keung on Tuesday denied he had hastily sold two residential properties ahead of an increase of the special stamp duty announced on last Friday, saying he had no knowledge of the policy before it was unveiled.

Last Friday, the government imposed a new stamp duty of 15 percent on properties bought by companies and non-permanent residents, in addition to a 10 to 20 percent Special Stamp Duty (SSD) on short term home resales within a three-year period. The special stamp duty is meant to cool the over-heated residential property market.

According to a media report on Monday, Lam sold two residential properties at Caine Road, West Mid-Level, on Sept 20 and Oct 10, after acquiring them in 2001, reaping profits in excess of HK$10 million. Lam said he had asked an estate agent to look for buyers for the properties several months ago.

When it was pointed out it appears one of the buyers may be a non-resident, Lam said he sold the property through an agent and paid no attention to the buyer's identity. The name of one of the buyers was written in Putonghua.

This means if the purchaser is an offshore buyer, he will be subject to the special stamp duty, amounting to HK$1.5 million if the transaction was concluded on or later than Oct 26.

Speaking to the media after the ExCo meeting on Tuesday, Lam said he made the decision to sell the properties in June or July before joining the cabinet, because he is no longer working full-time and needed cash to support his living.

"I am fully committed to Exco and I don't have a job because of that. To make a living, I made it clear when I joined Exco that I planned to sell some properties," Lam said.

And since he was away from Hong Kong most of last week, he did not know of the new measures, until he received an email on Friday night. He said he had not taken part in the discussions on the special stamp duty increase at cabinet meetings.

Lam that he had made declarations in accordance with the rules and regulations. Fellow ExCo member Regina Ip, who is also chairman of New People's Party, came to Lam's defence, saying that members learned of the new property market stabilization measures only at a contingency cabinet meeting held on Friday.

She went on to explain that if ExCo members sold their properties before the cabinet discussed any such policy, the question of conflict of interest does not arise.

DAB chairman Tam Yiu-chung, former ExCo member, said tax issues were rarely discussed at ExCo meetings because discussion of those issues is limited to very few people. If Lam was unaware of the new measures at the time of selling the properties, then the question of conflict of interest does not exist.

joseph@chinadailyhk.com

(HK Edition 10/31/2012 page1)