Hong Kong Stamp Duty Guide
In Hong Kong, stamp duty must be paid when certain documents are involved in buying or selling property or leasing property, or when Hong Kong stocks are bought or sold.
Stamp duty costs can be significant, especially when high-value properties or shares are involved.
It’s important to be aware of the relevant rules and obligations of stamp duty to avoid penalties for late or missed stamping.
Hong Kong Stamp Duty Types
As detailed in the Stamp Duty Ordinance (Cap. 117), stamp duty is mainly imposed on the following types of documents:
- Sale or transfer of immovable property located in Hong Kong
- Lease of immovable property (also known as “Tenancy Agreements”)
- Sale or transfer of Hong Kong stock
- Conveyance on sale also known as “Assignments”
Let’s take a deep dive into the different kinds of stamp duties in Hong Kong.
Sale or transfer of immovable property
Both residential property and commercial property are generally subject to stamp duty, namely the Ad Valorem Stamp Duty (AVD), and in some cases Buyer’s Stamp Duty (BSD) and/or Special Stamp Duty (SSD).
Ad Valorem Stamp Duty (AVD)
AVD is charged on the amount of the sale/transfer consideration or value of the property, whichever is the higher. Currently, the applicable rates are as follows:
|Amount of sale/transfer consideration or value of the property, whichever is the higher||Part 1 of Scale 1 Rates|
(See Note 1 below)
|Part 2 of Scale 1 Rates|
(See Note 2 below)
|Scale 2 Rates|
(See Note 3 below)
|$0 < $2,000,000||15%||1.5%||$100|
|$2,000,001 ≤ $2,176,470||15%||$30,000 + 20% of excess over $2,000,000||$100|
|$2,176,471 ≤ $3,000,000||15%||3%||$100|
|$3,000,001 ≤ $3,290,330||15%||$90,000 + 20% of excess over $3,000,000||$100 + 10% of excess over $3,000,000|
|$3,290,331 ≤ $3,528,240||15%||4.5%||$100 + 10% of excess over $3,000,000|
|$3,528,241 ≤ $4,000,000||15%||4.5%||1.5%|
|$4,000,001 ≤ $4,428,580||15%||$180,000 + 20% of excess over $4,000,000||1.5%|
|$4,428,581 ≤ $4,500,000||15%||6%||1.5%|
|$4,500,001 ≤ $4,935,480||15%||6%||$67,500 + 10% of excess over $4,500,000|
|$4,935,481 ≤ $6,000,000||15%||6%||2.25%|
|$6,000,001 ≤ $6,642,860||15%||$360,000 + 20% of excess over $6,000,000||$135,000 + 10% of excess over $6,000,000|
|$6,642,861 ≤ $6,720,000||15%||$360,000 + 20% of excess over $6,000,000||3%|
|$6,720,001 ≤ $9,000,000||15%||7.5%||3%|
|$9,000,001 ≤ $10,080,000||15%||7.5%||$270,000 + 10% of excess over $9,000,000|
|$10,080,001 ≤ $20,000,000||15%||7.5%||3.75%|
|$20,000,001 ≤ $21,739,120||15%||$1,500,000 + 20% of excess over $20,000,000||750,000 + 10% of excess over $20,000,000|
|$21,739,121 ≤ $21,739,130||15%||$1,500,000 + 20% of excess over $20,000,000||4.25%|
|$21,739,131 and higher||15%||8.5%||4.25%|
1. Unless specifically exempted or otherwise provided, the rate is applicable to the following:
- Instruments executed on or after 5 November 2016 for acquisition or transfer of residential property, unless the conditions for a lower rate (i.e. Scale 2 Rate) are met;
- A single instrument executed on or after 12 April 2017 for acquisition or transfer of more than one residential property.
This higher rate is introduced for the purpose of combating the speculative activities in residential properties in Hong Kong.
2. Unless specifically exempted or otherwise provided, the rates are applicable to the following:
- Instruments executed on or after 23 February 2013 but before 5 November 2016 for acquisition or transfer of residential property, unless the conditions for a lower rate (i.e. Scale 2 Rate) are met;
- Instruments executed on or after 23 February 2013 but before 26 November 2020 for acquisition or transfer of non-residential property.
These higher rates are charged also for the purpose of curbing the speculation on properties in Hong Kong.
3. Unless specifically exempted or otherwise provided, the rates are applicable to the following:
- Instruments for acquisition or transfer of a residential property, on the conditions that the purchaser/transferee is a Hong Kong permanent resident (HKPR) acting on his/her own behalf and he/she does not own any other residential property in Hong Kong at the time of acquisition of the subject property;
- Instruments executed on or after 26 November 2020 for acquisition or transfer of non-residential property.
The buyer, the seller, and any person who uses the instrument will be jointly and severally liable to pay AVD.
Buyer’s Stamp Duty (BSD)
Since 2012, BSD has been mandatory on an agreement for sale or a conveyance on sale executed for acquisition of residential property.
However, BSD is not applicable if the purchaser or the transferee is a Hong Kong permanent resident acquiring the property on his/her own behalf (i.e. the person is both legal and beneficial owner) or if a specific exemption applies.
The amount of BSD is calculated at 15% of either the stated consideration or the property’s market value, whichever is the higher, and is payable on top of the AVD.
The purpose of the BSD is to cool down the overheated transactions in the Hong Kong residential property market.
Special Stamp Duty (SSD)
Unless certain exemption conditions can be satisfied, SSD is chargeable if all the following three conditions are met:
- The transaction involves sale and purchase or transfer of a residential property;
- The property is acquired by the seller or transferor on or after 20 November 2010; and
- The property is disposed by the seller or transferor within a prescribed period (please refer to the table below)
The SSD rate is as follows:
|Holding period||SSD rate|
|6 months or less||20%|
|More than 6 months but for 12 months or less||15%|
|More than 12 months but for 24 months or less||10%|
|More than 24 months but for 36 months or less||10%|
Same as BSD, SSD is calculated based on the stated consideration or the market value of the property, whichever is the higher.
The seller and the buyer to the property transaction and any person who uses the instrument are jointly and severally liable for paying the SSD.
The introduction of the SSD is to curb speculation on residential properties.
Hong Kong stamp duty refund for eligible incoming talents (subject to legislation)
With a view to encourage incoming talents to stay in Hong Kong for long-term development, an incoming talent is eligible to apply for refund of the extra stamp duty paid on acquisition of residential property in Hong Kong, subject to the following conditions:
- He/she as an eligible incoming talent has acquired a residential property in Hong Kong on or after 19 October 2022;
- At the time of acquisition of the property concerned, he/she must hold a valid visa under the designated talents admission schemes and does not own any other residential property in Hong Kong (unless he/she acquires the property concerned to replace his/her only residential property in Hong Kong, i.e. to buy a new one and then sell the original one, within 12 months from the date of assignment of the property concerned);
- He/she has become a Hong Kong permanent resident (i.e. after residing in Hong Kong for seven consecutive years);
- At the time of application for refund of stamp duty, he/she is still the owner of the property concerned; and
- He/she can apply for refund in respect of one residential property only.
The potential stamp duty to be refunded is the BSD charged at 15% and the AVD charged at the Scale 1 Rates. Kindly note that the eligible incoming talents are still required to pay the AVD at the Scale 2 Rates.
Sale/transfer of Hong Kong stock
Sale/transfer of Hong Kong stock is generally subject to stamp duty, the rates of which are as follows:
|Nature of document||Rate (with effect from 1 August 2021)|
|Contract Note for sale or purchase of Hong Kong stock||0.13% of the amount of the consideration or of its value on every sold note and every bought note|
|Transfer operating as a voluntary disposition inter vivos||$5 + 0.26% of the value of the stock to be transferred|
|Transfer of any other kind||$5|
Hong Kong stamp duty relief
The Hong Kong Government introduces stamp duty relief, including Intra Group Relief, Stock Borrowing Relief and Islamic Bond Scheme Relief.
Regarding the Intra Group Relief, it is available for the transfer of Hong Kong immovable property or stock from one associated body corporate to another, subject to certain conditions.
Bodies are associated if:
- One is beneficial owner of not less than 90% of the issued share capital of the other; or
- A third such body is beneficial owner of not less than 90% of the issued share capital of each.
In order to be qualified for the Intra Group Relief, it is required, amongst others that:
- The transferor and the transferee remain to be associated for at least two years;
- None of the consideration for the transfer of the asset between the associated companies is provided or received, directly or indirectly, by a non-associated party(s).
How HKWJ Tax Law can help
Our tax professionals are competent to provide tax planning advice on how to best optimise your tax position in regards to a wide range of tax issues including stamp duty.
We also provide assistance regarding the stamp duty, including but not limited to:
- advising the chargeability, obligations and amount of stamp duty in respect of a particular transaction(s)
- ascertaining the eligibility of stamp duty exemption/relief claim
- applying for the intra-group relief and refund under the incoming talents scheme
- lodging appeals against the stamp duty assessments
- exploring the possible ways to achieve stamp duty efficiency
Contact us through the form below or contact our office via telephone or WhatsApp hotline.