How high are realtors’ and lawyers’ fees in Hong Kong? What about other property purchase costs?

How difficult is the property purchase process in Hong Kong?

Foreigners, in general, can buy properties such as condominiums in Hong Kong and rent out without restriction. However, Hong Kong is not open to Afghans, Albanians, Cubans, North Koreans and Chinese from the mainland (unless they are permanent residents in another country).

However, buying land is a different story. St. John’s Cathedral is the only freehold property in Hong Kong. This exception aside, all other land belongs to the government, and land tenure is on a renewable leasehold basis. Land leases have in the past been granted for 75, 99, or 999 years, and at present are being granted for 50 years.

Typically, the buyer pays a 5% of the purchase price as down payment when a preliminary sales and purchase agreement is signed. When a formal agreement is signed, he pays another 5%, and the rest of the balance is paid at closing, which can take six to eight weeks later.

Footnotes to Transaction Costs Table

The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.

Currency:
Hong Kong uses Hong Kong Dollar. Exchange rate is at US$1 USD = 7.78621 HKD as of 20th October 2006.


Stamp Duty:
Stamp duty is imposed whenever an individual sells property. The rates of Stamp Duty for the transfer of property are different from the rates of stamp duty for leasing out property. Stamp Duty for selling property varies, depending on the value of the property. Stamp Duty for selling property is borne by the buyer.

To compute for the Stamp Duty, please refer to the Inland Revenue Department's Stamp Duty Computation page here.

Legal/Solicitor's Fee:
As in most countries, legal fees are negotiable.

Agent's Fee:
Typically 1 - 2% for the seller, but this can be split between buyer and seller.

Registration Fee:
Registration of assignment.