Tuesday, March 25, 2014

US world wide tax


Hong Kong agrees to give financial data of Americans working in city to US tax authorities

Hong Kong tax officials will soon be able to pass information about the finances of Americans working in Hong Kong to their US counterparts under an agreement signed yesterday as part of Washington's global crackdown on tax evasion.
26 Mar 2014

US says Bitcoin is taxable as property, not a currency
[WASHINGTON] The US tax authority on Tuesday ruled that Bitcoin will be taxed as property, like stocks or real estate, rather than as a basic currency like the dollar.
Issuing the ruling just weeks before the April 15 deadline for paying 2013 taxes, the Internal Revenue Service may have dealt a setback to those wanting the online money to be officially recognized as a currency, like the dollar.
But the ruling benefited investors who could end up being taxed at a lower rate on gains they make from trading virtual currencies like Bitcoin.
"In some environments, virtual currency operates like 'real' currency," the IRS said.

China likely to seek personal tax details worldwide

China is expected to impose its own version of the new US tax law which requires financial institutions around the world to provide Washington with information on US taxpayers, analysts say.

On March 25, the Secretary for Financial Services and the Treasury Professor Chan Ka-keung signed an agreement with the US to allow Hong Kong officials to pass tax information of Americans working in Hong Kong to their US counterparts under the Foreign Account Tax Compliance Act (Fatca).
China, as a G20 member state, will probably follow suit, says Richard Weisman, a senior tax principal at the Hong Kong office of Baker & McKenzie, an international law firm. He said China will likely use a version of Fatca to collect tax information from Chinese citizens around the world including Hong Kong.
“Fatca is only the beginning of what will become a major new compliance obligation for financial institutions. The next major development with respect to Fatca will be the G20’s proposal to multi-lateralize Fatca. China, as a member of the G20, has endorsed this proposal. China can obtain tax information by joining the G20’s approach to Fatca. That is a likely scenario,” said Weisman.
At the G20 summit in St Petersburg last September, the leaders of 20 key economies declared that member states will start exchanging tax information automatically by the end of 2015.
If China goes ahead with its own version of Fatca and it applies to Hong Kong, it may affect Chinese nationals’ desire to park funds with Hong Kong financial institutions. But Hong Kong would be no worse than any other non-mainland jurisdictions as they are equally affected, said Patrick Yip, Greater China deputy tax managing partner of Deloitte Touche Tohmatsu.
Any new law would make it more difficult for corrupt Chinese officials, their relatives and associates to put their wealth in Hong Kong, Yip predicted.
Yip said that many financial institutions in Hong Kong are already finding compliance with Fatca costly and difficult. “Fatca is sending a clear signal to Americans about the seriousness with which the US government is pursuing tax evaders.”
Many banks in Hong Kong will not be ready when Fatca takes effect on July 1, said Gene Buttrill, a partner with US law firm Jones Day. “Perhaps they are hoping to bargain down their level of compliance. This is going to create a lot of work for US lawyers.”
Fatca will impact the private banking sector globally, with US and European banks in particular likely to be avoided by wealthy Asians banking in Hong Kong, said Buttrill. “It makes life much harder for my friends in private banking.”
Fatca will “have a great deal” of impact on Hong Kong people in general, added Buttrill. “In addition to wealthy individuals and green card holders, it affects the financial industry as a whole.”
SCMP, 2014 March 28

Sunday, March 23, 2014


Private Home Sales Soar in March 2017

Figures released on Monday showed that, in the primary market, developers sold 1,780 new private homes last month. This was the strongest showing since the 1,806 units they moved back in June 2013 -- MORE

Photo of sale of Seaside Residences in April 2017

Monday, March 17, 2014


Only In UK!

Property buyers in London are increasingly being asked to pay tens of thousands of pounds extra at the last minute, in a new, more aggressive form of “gazumping” that does not feature a rival bidder.

In a sign of the frenzied state of the capital’s housing market, estate agents say many sellers are raising the price of their homes days before the exchange of contracts.
Unlike the gazumping of the 1980s, when rival buyers stepped in at the last minute with a higher offer, this trend involves sellers increasing the price because they can – because there is so much demand for a small number of properties.
“It’s now very common and a depressing factor of a market with low supply and monster demand,” said Peter Rollings, chief executive of Marsh & Parsons estate agents.
This “ghost gazumping” typically happens several weeks after an initial offer is accepted, as rival estate agents door-knock sellers and tell them they have agreed to too low a price.
Dominic Agace, chief executive of Winkworth, said this was a “new phenomenon” that had not been seen before, even during the property bubbles of the 1980s and the mid-2000s. “It’s something that has not been around before. We obviously have had gazumping in the past but this is not something I have ever seen until now.”
Mr Agace said the trend was increasingly common in London suburbs including Dulwich, Twickenham, Shepherd’s Bush and Kensal Rise.
“We’ve just seen it happen with one house, where the deal was struck at £1m but the sellers have gone back and asked for £1.1m. The buyers are paying the higher amount,” he said.   - 2014  March 16   FINANCIAL TIMES


The Duke of Westminster
Britain's richest family, the Grosvenors, headed by the Duke of Westminster, has a fortune of around £7.9 billion, which is more than the bottom 10 per cent of the population combined
Britain's richest family, the Grosvenors, headed by the Duke of Westminster, has a fortune of around £7.9 billion, which is more than the bottom 10 per cent of the population combined Photo: EDDIE MULHOLLAND

Britain's richest family, the Grosvenors, headed by the Duke of Westminster, has a fortune of around £7.9 billion, which is more than the bottom 10 per cent of the population combined.
The Grosvenors' wealth derives largely from owning 190 acres of real estate in London's Belgravia, near Buckingham Palace, according to the Forbes rich list.
-- 2014 March 17  THE TELEGRAPH

Thursday, March 13, 2014

Los Angeles

Hong Kong Investor Purchase South Hills Plaza

Our friends did an astute purchase in the hot Los Angeles market recently.    

They beat 23 other purchasers to secure the purchase of the 120,589 sq ft South Hills Plaza in West Covina was acquired for a 6.8% cap rate.  

Marukai Market, a Japanese food specialty store and 24 Hour Fitness anchor the centre.   The parent co. of Marukai, runs more than 160 locations in Japan and Hawaii so is a secure tenant.    The community centre has a well established trading population since it was built in 1982.    Well done!

Shanghai Greenland pays a billion for Metropolis site

The project spans a full city block on Francisco Street, bordered by Eighth and Ninth streets. Phase 1 will include 308 luxury condo units and 7,326 sq ft of ground-floor retail.   In sum, Metropolis will boast some 1,500 units.

Monday, March 10, 2014


Districts 9,10,11

More owners of luxury condos selling at a loss
Yields also under pressure; low rentals leave more people struggling to pay mortgages

[SINGAPORE] A larger percentage of high-end luxury condo homes on the resale market are selling at a loss and a smaller percentage at a profit, as the tide of the once-rosy property market recedes and reveals those who have been "swimming naked" - that is, those without adequate holding power for their extravagant purchases.
According to data compiled by STProperty.sg from URA Realis, 7 per cent of transacted units in the prime districts 9, 10 and 11 sold at a loss in the first eight months of this year, up from 5.5 per cent over the same year-ago period.
Fewer people are profiting from their resales too: only 62.2 per cent enjoyed any capital gains - a steep drop from 83.5 per cent a year ago. And 4.5 per cent sold without making a profit or a loss (versus 0.4 per cent a year ago).
Yields are also under pressure. The low-rental environment is leaving more owners struggling to repay their mortgages. Assuming a S$1.6 million loan (equivalent to an 80 per cent loan limit for a S$2 million property) is taken out at an annual 1.5 per cent interest rate over a 30-year tenure, this would amount to a monthly mortgage of S$5,500. Rentals would therefore have to be in excess of this to cover mortgage payments.
"In some cases, the monthly rental cannot cover the mortgage. Take a S$5 million Sentosa Cove condo: it would take a monthly rent of S$13,800 to cover your loan," said Christine Li, head of research and consultancy at OrangeTee.
"That said, it's quite common that rents cannot cover monthly instalments, especially for bigger units. But those who don't have holding power would have to let go of their units. Others may be forced to do mortgagee sales," she added.
But not all the sellers who were willing to stomach losses were over-leveraged. Some could simply want to exit the market because they don't see the cooling measures ending anytime soon (meaning, they expect that price recovery is still far off), or just as a way of rebalancing their overall portfolio.
"A large proportion of purchases in the prime districts are by foreigners; perhaps they are just pulling out of Singapore. But the fall in demand for private homes makes it harder for sellers to find buyers. So if they really need to sell, they will have to lower their prices significantly," said Lee Lay Keng, DTZ's Southeast Asia regional head of research.
Investors would also have bought into high-end properties in major cities in the US, Europe and Australia, where there have been exciting properties launched in recent years, RST Research director Ong Kah Seng said.
In all likelihood, despite pulling out of Singapore, they might have profited elsewhere as other countries saw an uptick in residential property prices after the global financial crisis.
Meanwhile, loan curbs and price cutting by developers at new condo launches also continue to sap strength from the resale market.
Condo homes in the prime districts 9 (Orchard Road, River Valley), 10 (Bukit Timah, Holland, Balmoral) and 11 (Novena, Newton, Thomson) have traditionally been purchased as investment homes for capital gains and rental yields.

Buyers bank on demand from expatriate lessees, most of whom enjoy staying near the city. But with corporate housing budgets having shrunk post-financial crisis, these foreign workers are moving instead to the city fringes and suburbs, with some even renting HDB flats.
Losses made in resale transactions from January to August 2014 range from S$9,300 for a unit at The Hillier in Bukit Timah, to S$2.06 million for a unit at St Regis Residences in Tanglin. The latter was purchased at S$6.8 million in 2007, and sold for S$4.7 million in April this year.
Four units at The Promont (at Cairnhill), St Thomas Suites (near River Valley), Tanglin View and Waterscape At Cavenagh also resold at considerable losses of S$800,000 to S$1.2 million each (see table).
Notably, there were also four units at Robinson Suites on Shenton Way which resold at losses of about S$300,000.
Many of the loss-making resale transactions from the first eight months of this year were from sellers who bought their units in 2007, in the run-up to the previous peak in property prices and just when the financial crisis was starting.
Prices of these prime-location condos have recovered since, but dipped back down slightly from 2012 due to cooling measures. As at Q2 2014, prices were roughly on a par with the previous peak in 2008.
This means that not only would buyers who picked up condo units fresh at launch in 2007 not enjoy much capital gains, they may also suffer a loss if they sell now.
While analysts expect the trend of loss-making resale transactions to continue, they say it is unlikely to worsen significantly as long as economic conditions - such as low unemployment and interest rates - remain favourable.

Three adjoining Bukit Timah freehold properties up for sale
Seller expects offers above $45m for site with combined land area of 25,425 sq ft

BT 20140311 JKKF11 993085
Strategic location: One of the three properties being put up for sale by Knight Frank. The District 10 residential site offers double frontages of 42 metres' width onto both Queen's Road and Duke's Road

[SINGAPORE] Three adjoining freehold properties along Queen's Road and Duke's Road are up for tender, with the seller expecting offers above $45 million.
The residential site in Bukit Timah has a combined land area of 25,425 square feet. With a plot ratio of 1.4, it can yield a maximum permissible gross floor area of 35,595 square feet.
Knight Frank, the site's marketing agent, assumes a $5.8 million development charge for redeveloping apartments with a gross plot ratio of up to 1.4, which translates to $1,430 per square feet per plot ratio (psf ppr).
The District 10 site offers double frontages of 42 metres' width onto both Queen's Road and Duke's Road.