How Much is Stamp Duty for Sale and Transfer of Property in Hong Kong?

Hong Kong Stamp DutyIn Hong Kong, stamp duty is charged on the sale of stock at the rate of 0.26% of the consideration for each transaction. The stamp duty will depend on the property type and consideration for the conveyancing of immovable property in Hong Kong.

After 26th November 2020, ad valorem duties (AVD) will be subjected to any contract or deal carried out on the sale, purchase, or transfer of non-residential property according to the rates. Before moving forward, understanding what AVD is essential.

AVD is the duty rate based on legal document transaction value. It depends on the nature of the instrument. Sometimes, it could also refer to the market value of the property. The critical thing to remember about AVDs is that they are variable costs. On the other hand, we have fixed stamp duty – a predetermined set price that is not dependent on the instrument.

 

AVD Scale Rates

The Scale 1 AVD rates have been divided into Part 1 and Part 2. Part 1 (of Scale 1) applies to residential property. In contrast, Part 2 of the same scale applies to non-residential property and several residential property instruments carried out between 23rd February 2013 and 5th November 2016.

The Financial Secretary of the Government announced that the Stamp Duty Ordinance would be amended to adjust the AVD rates on 22nd February 2013. Fast forward to 5th November 2016, AVD has been amended to a flat rate of 15% for residential property transactions. This, however, is not applicable to agreement or conveyance for residential properties where:

  1. Person purchasing or transferring is not a Hong Kong permanent resident.
  2. The person is acting on their own behalf.
  3. The person does not own any residential property in the region (during the acquisition).

The old AVD rates will apply to these cases mentioned above. Check out the complete list of Stamp Duty Rates here.

 

Special Stamp Duty and Buyer’s Stamp Duty

Those who acquired titled residential properties on 20th November 2010 (and afterwards it) and resold them within 24 months (20th November to before 26th October 2012) or 36 months (applies to property acquired on or post 27th October 2012) must pay Special Stamp Duty or SSD. The SSD is determined based on property market value or by reference to the stated consideration – whichever rate is higher. The rates differ from holding periods.

Unless exempted, Buyer’s Stamp Duty (also known as BSD) will be payable on agreement or conveyance on sale for any residential property acquisition. This condition took effect on 27th October 2012 and states that BSD will be charged at 15% on stated consideration or property market value – depending on which one is higher.

You can contact 3E Accounting for any assistance related to taxation in Hong Kong.

Hong Kong Stamp Duty