Hong Kong Halves Stamp Duty for Non-Permanent Residents and Stamp Duty Suspension for Overseas Talents

Chief Executive John Lee Ka-chiu delivered his second Policy Address on 25 October 2023. 

In order to reduce the costs of Non-Hong Kong Permanent Residents in their acquisition of residential properties and to alleviate the financial burden on Hong Kong Permanent Residents who already own residential properties in their acquisition of another residential property, the following stamp duty measures have been relaxed:-

Ad Valorem Stamp Duty (“AVD”)

AVD is payable when one has entered into a binding sale and purchase agreement (“acquisition” or “acquiring” or “acquire”) of residential property in Hong Kong at a scale rate ranging from HK$100 for properties under HK$3 million up to 4.25% of the sale price for property over $21,739,120. This AVD rate applies to Hong Kong Permanent Residents acquiring their first home.

For buyers who are Non-Hong Kong Permanent Residents, a company or body corporate or Hong Kong Permanent Residents buying a second or additional residential property, the AVD payable at a flat rate has been lowered from 15% to 7.5% of the higher of the consideration or market price of the property.

Buyer’s Stamp Duty (“BSD”)

In addition to AVD, a buyer who is a Non-Hong Kong Permanent Resident or a company or body corporate acquiring residential property in Hong Kong, BSD is payable.

The rate of BSD has been lowered from 15 % to 7.5 % of the higher of the consideration or market price of the property.

How much has stamp duty been lowered for a Non-Hong Kong Permanent Resident?

In conclusion, if a Non-Hong Kong Permanent Resident acquires residential property in Hong Kong, AVD and BSD are payable and these rates have been lowered from 30% to 15%.

Special Stamp Duty (“SSD”)

Special Stamp Duty levied for re-sale of residential property within three (3) years from the date of acquisition will be shortened to two (2) years. 

In other words, if a property owner disposes of his/her property two years after acquisition, the owner will no longer have to pay SSD, which used to be an amount equivalent to 10 % of the higher of the consideration or market price of the property.

Stamp Duty suspension for overseas talent

Overseas buyers who enter Hong Kong under designated talents admission schemes (“Eligible Talents”) who acquire residential property can apply for suspension of payment of additional stamp duty (i.e. BSD (7.5%) and the flat rates of AVD (7.5%)) of the higher of the consideration or market price of the property. 

Eligible Talents will only be required to pay stamp duty at a maximum rate of 4.25% of the higher of the consideration or market price of the property. This treatment is the same as that for first-time home buyers who are Hong Kong Permanent Residents.

Once the application for suspension of stamp duty is approved, the applicable document will be stamped with a stamp denoting that the Eligible Talent’s liability to stamp duty in respect of a specified amount has been suspended (“Outstanding Stamp Duty”). The Inland Revenue Department will register a certificate of charge against the property to secure the payment of Outstanding Stamp Duty.

Upon the Eligible Talent becoming a Hong Kong Permanent Resident, he can apply for a waiver in relation to the stamp duty suspension.  

How much stamp duty can be saved under this stamp duty suspension scheme for overseas talents?

This newly introduced stamp duty suspension scheme essentially saves around 10.75% of the stamp duty that Eligible Talents originally had to pay as Non-Hong Kong Permanent Residents acquiring residential property in Hong Kong.

It should however be noted that the Eligible Talents are required to pay the relevant additional amount of stamp duty if he/she is subsequently found not eligible to qualify as a Hong Kong Permanent Resident or if he/she sells the property before becoming a Hong Kong Permanent Resident or have failed to apply for stamp duty waiver (within 9 years from their first permission to stay in Hong Kong under designated talents admission schemes).

You may want to read more about the latest talent admissions scheme here. 

Stock trading stamp duty

Stock trading stamp duty is lowered from 0.13% to 0.1% of the value of trade for buyers and sellers respectively. It also means that buyer who acquires residential property through the acquisition of shares in property-holding companies incorporated in Hong Kong will only have to pay 0.2% as stamp duty (as the usual practice is for the buyer to bear the entire stamp duty for the transaction).