Tax benefits for building reconstruction was passed at the Legislative Assembly (AL) last Friday. The law proposes tax benefits for the reconstruction of old buildings, with the government including an “extra stamp tax” rebate in the regime.
In total, there are six tax types: stamp tax for property transfer, extra stamp tax, special stamp tax, stamp tax for obtaining second or subsequent properties, the stamp tax, and fees for notary endorsements and registration.
The tax rebate can be requested for the reconstruction of buildings which aim to strengthen Macau’s social development and preservation of cultural heritage. It can also be applied to the reconstruction of buildings which follow their original plan or to a plan approved by the Land, Public Works and Transport Bureau (DSSOPT), for the reconstruction of buildings that pose a risk to the public, and for the reconstruction of buildings that DSSOPT has approved for demolition.
In order to avoid abuse of the policy, the bill established restrictions on the number of properties, utilization purpose of the properties, and the actual area of the properties, as well as the ownership of the properties.
According to the bill, it is proposed that developers will not have to pay taxes over the acquisition of a second or more building if the developers do not change the nature of the building’s function. Nevertheless, the developers must complete the groundwork regarding the reconstruction of the buildings within three years after the acquisition.
A new property obtained by a given owner cannot be more than 10 percent larger than the owner’s previous property.
Owners cannot transfer the ownership of a property within three years after it is obtained, if they have already benefited from the new tax laws.
Agnes Lam expressed that when it comes to the reconstruction of old buildings concerning cultural heritage, the government should regard the city’s cultural heritage protection committee as an opinion consultation agency.
Financial Services Bureau director Iong Kong Leong said in his reply to Lam that the bill aims to provide tax benefits and exemptions to the concerned parties, and that while the bill outlines the eligibility criteria for the tax benefits, it does not mean that a building’s reconstruction can be carried out without complying with other legal requirements.
Hence, Iong considers that there is no need to include the cultural heritage protection committee as an opinion consultation agency.
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