4% Interest Rate Subsidy Scheme to be Resumed Next Year Plus Government Guarantee of 20% Mortgage Loan

The government recently announced that the 4% Interest Rate Subsidy Scheme would be resumed early in 2009 for permanent residents buying their first home priced at MOP3 million or less. Homebuyers may concurrently apply for the government’s 20% guarantee for a mortgage loan, provided that the buyer makes at least 10% down payment for the purchase, and that the mortgage loan guaranteed by the government does not exceed 20% of the property’s purchase price.

In addition, the government is going to present a motion to the Legislative Assembly that it continue to exempt property transfer stamp duty on properties of up to MOP3 million on the first residential property transfer deal, and a decrease of stamp duty to 1% for other real estate transactions, and that these initiatives be incorporated into the tax regime on a long term basis. Chief Executive Edmund Ho made it clear that the previous Investment Immigration Scheme would not be resumed in the near future; instead, the above-proposed measures may help enable residential properties to become affordable to young and middle-class citizens, thereby relieving pressure on demands for public housing as well as reviving the stagnant property market.

The property industry feels confident that the government’s new subsidy schemes, with the return of property prices to a reasonable level, will stimulate property transactions and eventually revive the property market. It is believed Macao’s property market will not go into an irreversible decline. As current property prices have returned to a reasonable level, it is obviously a favourable time for home buying.