Recently introduced taxes to curb Hong Kong’s hot property market will push investors to the commercial real estate sector and hit turnover in some sectors significantly, according to property firmCushman & Wakefield in its monthly market note.

The Hong Kong government has recently announced a special Buyer’s Stamp Duty for non-local residents. At a rate of 15 per cent, the tax will apply to all residential property transactions for anybody not a permanent resident in the city.

Vincent Cheung Kiu-cho, national director of valuation and advisory services, Greater China, at the firm, expects transaction volume will slide by 30 per cent to an “extremely low” level in the next 12 months since last month.

The jurisdiction has also adjusted what is called Special Stamp Duty on residential deals and extended its application period.

There is a chance that SSD could be later applied to non-residential properties – but such a move may face more opposition than previous changes, argues John Siu, managing director, Hong Kong, at the firm.

If restrictions on non-residential properties are imposed, Hong Kong’s reputation as a free market will be harmed; investors may lose confidence in Hong Kong, he said.

As a result of the taxes, investment into non-residential sectors can expect to increase, argued Michele Woo, senior director of retail transaction services at the firm in Hong Kong, said.

Recently retail leasing has been quiet and landlords are now more receptive to confirm in more flexible terms and lower than expected rental. This to a certain extent reveals that rents may have reached their peaks, she said.