Leong Heng Teng
The Executive Council has concluded its discussion on tax benefits for the reconstruction of old buildings in order to alleviate the cost pressures, the council spokesperson Leong Heng Teng announced Friday, during a press conference.
The tax benefits proposal is a step made by the government towards speeding up the urban renewal process.
The proposal concerns buildings that have been deemed dangerous, buildings that pose threats to public safety, and buildings that the Chief Executive has described as being beneficial for Macau’s social development, or for the purpose of protecting the city’s cultural heritage.
According to the bill, it is proposed that developers will not have to pay taxes over the acquisition of a second (or third, fourth, and so on) 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.
Owners of properties in the old buildings can also have their taxes waived over the acquisition of reconstructed properties.
However, there are certain limitations. For instance, a new property obtained by a given owner cannot be more than 10 percent larger than the owner’s previous property. Other restrictions include the number of new properties.
“Residences can only be residences, shops can only be shops. Property owners need to pay taxes in function of the difference [in case they own different kinds of properties],” said Iong Kong Leong, director of the Financial Services Bureau.
Owners can only purchase new residences if their previous properties were residences as well. This same policy is also applied to shop owners, since owners cannot acquire a new property which serves a different purpose than their previous properties.
Moreover, owners cannot transfer the ownership of a property within three years after it was obtained, if they have already benefited from the new tax laws.
According to Iong, owners will only enjoy the tax benefits if they own no more than their previous number of owned properties, and “can enjoy tax benefits concerning, at most, two units.”
When talking about the reconstruction of culturally valuable buildings, Iong noted that “[the policy] also applies for cultural relics which are only partially reconstructed. Later, we will inspect whether the reconstruction has changed the structure of the original architectural form.”
The policy is said to serve for “only reconstruction purposes, not any other purpose.”
Telecommunication license fees reduced
The Executive Council announced on Friday that it has concluded the analysis of a law proposing a reduction in the license fees for telecommunication service providers.
The bill proposes to charge companies 10 percent of the income resulting from services these companies provide, in particular audio and video calls, text messages and mobile data.
The purpose behind the proposal is to “allow tourists to further enjoy the beneficial cross-region telecommunication services, as well as to create helpful conditions for Macau residents to enjoy, [and] in the future, increasingly favorable cross-region telecommunication fees.”
According to representatives of the city’s telecommunication authority, this proposal will result in a decrease of the Macau government’s revenue by MOP24 million in taxes.
A similar reduction has also been suggested for license fees concerning WiFi services.
After the law is passed, service providers will only pay the government half of what they are paying now in terms of WiFi service licenses.
This reduction has been suggested in order to encourage the providers to expand WiFi coverage area.
The policy will represent an annual reduction of MOP1.7 million in taxes collected.
In addition, the government has also waived the license fees of WiFi spots located in public areas, in the hope more residents will have access to free WiFi, with access spots available at more places.
By not charging the telecommunication companies for providing WiFi in public spots, the government will see a reduction of MOP60,000 in its tax income.
The bill is expected to come into effect on May 1.
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