Global Property Guide

Financial Information for the Residential Property Buyer


Surcharge has temporarily raised roundtrip buying costs in Hong Kong to discourage foreign buyers

Last Updated: September 30, 2014

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

Transaction Costs

Who Pays?
Ad Valorem Stamp Duty (AVD) 1.50% - 8.50% buyer
Special Stamp Duty (SSD) 5% - 20% buyer
Buyer Stamp Duty (BSD) 15% buyer
Solicitor’s Fee 0.075% - 0.125% buyer
Real Estate Agent’s Fee 0.50% - 1%
0.50% - 1%
buyer
seller
Costs paid by buyer 22.08% - 44.63%
Costs paid by seller 0.50% - 1%
ROUNDTRIP TRANSACTION COSTS 22.58% - 45.63%
See Footnotes
Source: Global Property Guide

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).

Hong Kong luxury townhouses

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


Ad Valorem Stamp Duty (AVD) on Property Sales

Ad valorem stamp duty is levied on sale or transfer of property in Hong Kong as of 23 February 2013, unless there are specific exemptions provided by the government.

AD VALOREM STAMP DUTY (AVD) ON PROPERTY SALES

PROPERTY VALUE, HKD (US$)
TAX RATE
Up to 2 million (US$257,732)
1.50%
2 million – 3 million (US$386,598)
3.00%
3 million – 4 million (US$515,464)
4.50%
4 million – 6 million (US$773,196)
6.00%
6 million – 20 million (US$2,577,320)
7.50%
Over 20 million (US$2,577,320)
8.50%

The following stamp duty rates are applicable to residential properties acquired by Hong Kong permanent residents who do not have any other residential properties in Hong Kong when they acquired the property.

STAMP DUTY ON PROPERTY SALES

PROPERTY VALUE, HKD (US$)
TAX RATE
Up to 2 million (US$257,732)
HKD100 (US$13)
2 million – 3 million (US$386,598)   
1.50%
3 million – 4 million (US$515,464)
2.25%
4 million – 6 million (US$773,196)   
3.00%
6 million – 20 million (US$2,577,320)
3.75%

Over 20 million (US$2,577,320)

4.25%

Special Stamp Duty (SSD) on Residential Property Sales

There is a special stamp duty that applies for residential property as of 20 November 2010, if it is resold within 24 months or 36 months. The applicable rate varies, depending on when the property was acquired and the holding period of the property before it was sold.

SPECIAL STAMP DUTY FOR PROPERTIES ACQUIRED NOV 20 2010 TO 26 OCT 2012

HOLDING PERIOD
RATE
Up to 6 months
15%
6 months – 12 months
10 %
12 months – 36 months
5%

SPECIAL STAMP DUTY FOR PROPERTIES ACQUIRED 27 OCT 2012

HOLDING PERIOD
RATE
Up to 6 months
20%
6 months – 12 months
15 %
12 months – 36 months
10%

Solicitor’s Fee

Solicitor’s fees are around 0.075% to 0.125% of property value.


Registration Fee:
Registration of assignment.

 

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