A mansion in Hong Kong that was last listed for $86 million has just sold to an anonymous, local buyer, according to Bloomberg. And due to a loophole in the Hong Kong tax code, that buyer won’t be paying any property taxes on his purchase at all.
The home is 8,000 square feet and was newly constructed. Its final selling price is still unknown.
All that is known about the owner is that he is “an experienced buyer from Hong Kong.” Being a local, he should have paid a 15 percent tax on the purchase, but he managed to get out of paying anything by using a loophole that allows super wealthy buyers to purchase the property through an LLC that is registered abroad. The buyer buys the LLC, which owns the property, not the property itself, and therefore has to pay no property taxes.
According to Bloomberg’s Frederik Balfour, there is no way for the government to control this loophole unless it decides to require that all properties are owned by individuals, not corporations. And given how the main beneficiaries of this loophole are the wealthy and powerful, such action seems unlikely to happen anytime soon. [Bloomberg]