Hong Kong Residential Tax Property Infographic

WHAT ARE THE COSTS INVOLVED IN BUYING A HONG KONG RESIDENTIAL PROPERTY?
 

What Are The Deposits Required?

Deposits for standard acquisition of Hong Kong residential property are:

1. Initial deposit (5%) to be paid upon the signing of the Provisional Sales and Purchase Agreement 
2. Further deposit (5%) to be paid 2 weeks later
3. Balance of 90% to be paid 6 weeks later
 

What Are The Standard Agency Fees?

1% of sales price is the standard Hong Kong agency fee, payable by both a vendor and a purchaser.
 

What Are The Current Stamp Duty Rates?

There are 4 categories of stamp duty when buying a residential property in Hong Kong; Ad Valorem Stamp Duty (Original AVSD), New Ad Valorem Stamp Duty (New AVSD), Buyers Stamp Duty (BSD) and Special Stamp Duty (SSD).

Stamp Duty is payable within 30 days after the signing of the formal Sales and Purchase Agreement.

1. What Is Original Ad Valorem Stamp Duty (Original AVSD)?

The original stamp duty rates for purchasing residential property in Hong Kong before the Government implemented new measures to cool the market in February 2013. 

These Original AVSD rates are now only applicable to Hong Kong Permanent Residents buying their first residential property in Hong Kong: 

 
original avsd
 

2. What Is New Ad Valorem Stamp Duty (New AVSD) (Effective Date: 5th November 2016)?

If a Hong Kong Permanent Resident already owns a residential property in Hong Kong, they are now liable to pay the New AVSD of 15% when acquiring a second residential property, regardless of the price. This also applies to additional car parking spaces bought separately:

3. What Is Buyers Stamp Duty (BSD) (Effective Date: 27th October 2012)?

A Non Hong Kong Permanent Resident or a Company buying a residential property in Hong Kong must now pay 15% of purchase price + New AVSD.

4. What Is Special Stamp Duty (SSD) (Effective Date: 20th November 2010 & Updated 27th October 2012)?

Anyone owning Hong Kong residential property wishing to sell it within 3 years of purchasing it will be subject to SSD:

 
 

 

What Are The Associated Legal Fees?

Approximately 0.1% of the sales price for a standard acquisition of a Hong Kong residential property.

 

What Are The Recurring Costs Involved?

1. Management Fees

Management fees vary according to the number of units and the buildings facilities.

Every building has an Incorporated Owners Committee (IOC). They are responsible for ensuring the maintenance and upkeep of the premises. One of their main roles is to appoint a management company to ensure the smooth running of the premises. The IOC determines the Management Fees and these are payable on a monthly basis. 

2. Government Rates

The Government rates are approximately 5% of the estimated annual rental and are payable on a quarterly basis.

They are determined by the Government with due adjustments to reflect any differences in size, location, facilities, standards of finish and management.

3. Government Rent

The Government Rent is approximately 3% of the rateable value of the property and is payable on an annual basis.

The Government rents are determined by the Government for the lease of the Government land on which the premises stand. All privately owned land in Hong Kong is normally held by the Government.

4. Property Tax

A Property Tax is payable if the property is rented to a Tenant. The annual amount payable is 15% of the annual rental.

The following deductions can be applied:

  • Government Rates
  • Mortgage interest payments for up to 5 years 
  • Less a 20% statutory allowance for renovations/improvements.

5. Accountant

Whilst not totally necessary, some owners appoint an accountant whose annual charges amount to between approximately HK$10,000 to HK$15,000 per year. If you buy in a company name it is advisable, and an annual Business Registration Fee currently set at HK$2,250 will also be payable.

6. Insurance

If the property is purchased with a mortgage, it is mandatory to have an insurance policy in place. The Mortgage Bank will advise you of their particular insurance packages.

7. Utilities

  • Gas
  • Water
  • Electricity


 

Subject to contract and availability, the information contained herein has been obtained through sources deemed reliable by Place Property Limited but cannot be guaranteed as to its accuracy. It is not intended to constitute part of an offer or contract and is subject to change. You are advised to seek independent legal advice before entering into a formal agreement. A standard agency fee of 1% of the sales price will be payable to Place Property Limited (“PLACE”) by the purchaser and vendor, respectively, upon the signing of the formal sales and purchase agreement. A standard agency fee of 50% of one month's rental will be payable to Place Property Limited by the landlord and tenant, respectively, upon the signing of a tenancy agreement.