Gov’t proposes easing real property transaction restrictions in new bill

Local restrictions on real property transactions will be relaxed pending the passage of a new bill, the Executive Council (ExCo) announced to a press conference over the weekend.

The bill has recently left the ExCo following discussions and will be submitted to the parliament. The proposed adjustments are anticipated to take effect on the first day of 2024.

The proposal includes a universal reduction of the maximum loan to value ratio for mortgages for residential units, from 90% to 70%. Currently, the maximum ratio depends on the property prices concerned.

However, the ratio for government subsidized housing – also known as Economic Housing – will remain at 90%.

The government has also proposed that in addition maintaining a mortgage applicant’s debt-service coverage ratio at not higher than 50% of their income, banks should also run stress tests on applicants to ensure the debt-service coverage ratio does not surpass 60% of income, even with a 2% interest hike.

Tax incentives are also part of the proposal, with the 5% acquisition stamp duty for the second concurrent property acquired suggested for elimination. However, the 10% stamp duty for the third property will remain.

Existing stipulations and requirements will continue to govern transactions until the bill is enacted.

The current laws were enacted in 2010, aimed at curbing speculation and addressing the residential needs of local residents, the ExCo added.

In another bill, the government proposes further steps towards a paperless system real property registration, business registration and notarial services.

Documents such as ownership transfers, mortgage applications and mortgage cessations can be submitted digitally by buyers, sellers and their lawyers. Notaries will also be authorized to notarize digital documents, and entrepreneurs will be permitted to conduct certain procedures electronically.

The government also proposes to empower certain civil servants to validate signatures, and the Commercial and Movable Property Registry will be authorized to nullify long-term unused registered business brands.

Insurance agents to see updated requirements

Another Bill introduces minimum educational requirements for insurance agents, to be monitored and verified by the Monetary Authority of Macao (AMCM). The validity of licenses is proposed to be extended to two years, and renewals will be subject to proof of the requisite training.

The concept of Main Intermediary and Business-keeper will also be introduced by the Bill, and the number of these roles will be determined by the AMCM. The supervision of insurance intermediaries is set to be escalated.