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UPDATE 1-Hong Kong to tax overseas property buyers in bid to cool market

* 15 pct property tax to be charged on non-resident buyers

* HK stiffens resale stamp duty fees and applicability period to deter speculation

* High property prices seen as rising risk to Hong Kong's financial stability

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HONG KONG, Oct 26 (Reuters) - Hong Kong is to introduce new property cooling measures, including a new 15 percent tax on overseas buyers, to curb a rise in prices to increasingly unaffordable levels, Financial secretary John Tsang said on Friday.

It will also raise stamp duty on short-term property transactions to dampen speculation, the first time the government has taken such direct measures to curb what many see as excessive overseas buying, particularly from mainland Chinese buyers, for driving the market beyond record 1997 levels.

Tsang said these were extraordinary measures at an exceptional time, describing the market as ``going against the economic fundamentals of Hong Kong'', fuelled by low interest rates, easy credit and a flood of mainland Chinese buyers.

``The risk of a property bubble forming has increased greatly. It may be a threat for the Hong Kong macro-economy and the stability of the financial system,'' Tsang told reporters.

The city's red-hot property market has risen about 20 percent in the first nine months of this year, with even small and medium-sized units surging some 21 percent.

Under the new measures, a so-called buyer's stamp duty of 15 percent would be imposed on non-Hong Kong permanent resident buyers and companies.

A so-called special stamp duty imposed on buyers seeking to sell their properties within two years of purchase would be imposed on buyers seeking to sell within three years.

The scale of stamp duty would be increased to 20 percent for those selling within six months, to 15 percent within a year and ten percent from 12-36 months.

Foreign buyers accounted for 19.5 percent of total residential property sales in the primary market in 2011, up from 5.7 percent in 2008. Foreign buyers accounted for 6.5 percent of total residential transactions in 2011 against 3.1 percent in 2008.

Previous initiatives by the government seem to have failed to halt the rise, with analysts saying expectations had prevailed that the market would likely continue to rise given a flood of hot money from the United States' latest round of quantitative easing, low interest rates and plentiful demand from mainland Chinese.

Hong Kong's de facto central bank last month ordered banks to curb home loans to borrowers with more than one mortgage to prevent the city being flooded with hot money after the United States announced an aggressive new stimulus plan to spur growth.

(Reporting by Alison Leung, Lee Chyen Yee and Michelle Chen; Writing by James Pomfret; Editing by Nick Macfie)