Buying a new home is exciting! Yet in Hong Kong, it’s better getting familiar with all the costs associated with the sale and purchase of a property. Apart from the flat price itself, other expenses, such as stamp duty, should not be overlooked. What are the common types of stamp duty in place in the local property market? How are they calculated? Here’s what you need to know.
Jump to: Why is Stamp Duty required? | Ad Valorem Stamp Duty (AVD) | Special Stamp Duty (SSD) | Buyer’s Stamp Duty (BSD) | Late Payment of Stamp Duty | FAQ
Recent Update
- All property cooling measures – Special Stamp Duty (SSD), Buyer’s Stamp Duty (BSD) and New Residential Stamp Duty (NRSD) are scrapped. (2024-02-28)
- New Residential Stamp Duty (NRSD) and Buyers’ Stamp Duty (BSD) reduced from 15% to 7.5% for non-permanent residents and for residents buying a second or additional home. (2023-10)
- Special Stamp Duty (SSD) equivalent to 10% of home price will be waived for owners who resell property after two years, cut from three years. (2023-10)
Why is stamp duty required?
Stamp duty (also known as a stamp tax) is a tax a government levies on documents that are required to legally record certain types of transactions. In terms of property transaction, such documents are those recording the legal transfer of the property. After the stamp duties are paid, those documents are granted legal protection, as only stamped documents can be used as evidence in court.
The amount of payable stamp duty relies on the property’s price, the buyer’s identity and any late charge incurred.
Types of stamp duty applicable to local residential property
Three types of stamp duty are applicable to the transfer of residential property. Whether a buyer has to pay part or all of those depends on his “identity”. The three types of stamp duty are:
- Ad Valorem Stamp Duty (AVD)
- Special Stamp Duty (SSD)
- Buyer’s Stamp Duty (BSD)
Note that purchase of car park space is subject to the AVD, despite being a non-residential property.
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Ad Valorem Stamp Duty (AVD)
The AVD applies when the assignment of a property is changed. The tax rates are divided into Scale 1 (Part 1 & 2) and Scale 2, with first-time home purchase calculated at the lowest rates.
AVD for First-time Home Buyers (Rates under Scale 2)
- applicable to Hong Kong permanent residents who are buying their first homes on their behalf and do not own any other residential properties in Hong Kong at the time of acquisition
- buyers who are switching properties and wish to claim partial refund of the AVD paid on acquisition of the new property, must sell their original property within 12 months after the date of conveyance of the new property.
| Exceeds | Does Not Exceed | Stamp Duty Rates |
|---|---|---|
| HK$0 | HK$3,000,000 | HK$100 |
| HK$3,000,000 | HK$3,528,420 | HK$100＋10% of excess over HK$3,000,000 |
| HK$3,528,420 | HK$4,500,000 | 1.5% |
| HK$4,500,000 | HK$4,935,480 | HK$67,500 + 10% of excess over HK$4,500,000 |
| HK$4,935,480 | HK$6,000,000 | 2.25% |
| HK$6,000,000 | HK$6,642,860 | HK$135,000＋10% of excess over HK$6,000,000 |
| HK$6,642,860 | HK$9,000,000 | 3% |
| HK$9,000,000 | HK$10,080,000 | HK$270,000＋10% of excess over HK$9,000,000 |
| HK$10,080,000 | HK$20,000,000 | 3.75% |
| HK$20,000,000 | HK$21,739,120 | HK$750,000＋10% of excess over HK$20,000,000 |
| HK$21,739,120 | – | 4.25% |
AVD for Non-First Time Home Buyers (Rates under Part 1 of Scale 1)
The AVD aims to curb property speculation, such as “buy-to-sell” deals. Any type of buyers mentioned in the table below will be subject to higher AVD rates (or New Residential Stamp Duty) under Part 1 of Scale 1.
| Applicable to higher AVD rates | from 5 November 2016 to 24 October 2023 | on or after 25 October 2023 |
|---|---|---|
| Non-Hong Kong Permanent Residents | 15% | 7.5% |
| Non-First Time Home Buyers | 15% | 7.5% |
| Buying more than 1 residential property under a single instrument | 15% | 7.5% |
| Buying property in the name of a company | 15% | 7.5% |
For eligible incoming talents who purchase a residential property in Hong Kong and subsequently become a Hong Kong permanent resident after residing in Hong Kong for seven years, they can apply for a refund of the AVD paid for the first residential property purchased, but they still need to pay the AVD at Scale 2 rates.
The refund is applicable to those talents who purchase a residential property in Hong Kong between 19 October 2022 and 24 October 2023.
It’s worth noting that the tax arrangement has been further relaxed on the day of John Lee’s 2023 Policy Address. Starting from 25 October 2023, the eligible incoming talents no longer have to pay the stamp duty (Rates under Part 1 of Scale 1) upfront unless they fail to become permanent residents after seven years.
Note: New Residential Stamp Duty (NRSD) is scrapped and the Rates under Part 1 of Scale 1 is not available starting from 28 February 2024. All types of buyers refer to the Rates under Scale 2 from 28 February 2024 onward.
AVD for Non-residential Properties
In view of the worsening property speculation, the government doubled the AVD rates charged to the sale and purchase of all immovable properties in 2013.
But the higher rates were withdrawn in 2020 , after the non-residential property markets had seen a significant drop in transaction volumes. The authority followed to announce that any instrument executed on or after 26 November 2020 for the sale and purchase or transfer of non-residential property will be subject to AVD at the rates under Scale 2.
In Paul Chan’s 2023 Budget Speech, the stamp duty rates were further eased for any instrument executed on or after 22 February 2023.
| Exceeds | Does Not Exceed | Stamp Duty Rates |
|---|---|---|
| HK$0 | HK$3,000,000 | HK$100 |
| HK$3,000,000 | HK$3,528,420 | HK$100＋10% of excess over HK$3,000,000 |
| HK$3,528,420 | HK$4,500,000 | 1.5% |
| HK$4,500,000 | HK$4,935,480 | HK$67,500 + 10% of excess over HK$4,500,000 |
| HK$4,935,480 | HK$6,000,000 | 2.25% |
| HK$6,000,000 | HK$6,642,860 | HK$135,000＋10% of excess over HK$6,000,000 |
| HK$6,642,860 | HK$9,000,000 | 3% |
| HK$9,000,000 | HK$10,080,000 | HK$270,000＋10% of excess over HK$9,000,000 |
| HK$10,080,000 | HK$20,000,000 | 3.75% |
| HK$20,000,000 | HK$21,739,120 | HK$750,000＋10% of excess over HK$20,000,000 |
| HK$21,739,120 | – | 4.25% |
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Special Stamp Duty (SSD)
This tax is introduced to curb property speculation activities such as quick turnover transactions. It is charged on top of the AVD.
- any properties resold within specific ‘holding periods’ shall be charged.
- only applicable for residential properties acquired on or after 27 October 2012.
| SSD Rates for the Holding Period | from 27 October 2012 to 24 October 2023 | on or after 25 October 2023 |
|---|---|---|
| 6 months or less | 20% | 20% |
| More than 6 months but for 12 months or less | 15% | 15% |
| More than 12 months but for 24 months or less | 10% | 10% |
| More than 24 months but for 36 months or less | 10% | N/A |
Note: Special Stamp Duty (SSD) is scrapped starting from 28 February 2024.
Buyer’s Stamp Duty (BSD)
This tax, also known as “non-Hong Kong Permanent Resident Stamp Duty” , is charged against purchasers who are overseas investors or companies on top of the AVD.
| Applicable to BSD rates | from 27 October 2012 to 24 October 2023 | on or after 25 October 2023 |
|---|---|---|
| Non-Hong Kong Permanent Residents | 15% | 7.5% |
| Buying property in the name of a company | 15% | 7.5% |
Note: Buyer’s Stamp Duty (BSD) is scrapped starting from 28 February 2024.
Late Payment of Stamp Duty
Late payment of stamp duty will incur a penalty of up to a maximum of 10 times of the original amount.
| Late Term | Stamp Duty Charge |
|---|---|
| Does not exceed 1 month | 2 times of the original amount |
| Exceeds 1 month, but not exceeding 2 months | 4 times of the original amount |
| Other conditions | 10 times of the original amount |
As mentioned earlier, home prices affect the amount of stamp duty charged to the property. If you are looking for a specific price range, go to www.spacious.hk to get filtered listings of your interest or contact our sales team at sales@spacious.hk to find out the best listing package for you!
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FAQ
Who (purchaser or vendor) shall pay the Ad Valorem stamp duty when buying a home?
The stamp duty is usually paid by the purchaser, but sometimes developers may provide some tax concessions to purchasers as part of their new flat selling plan.
When is Ad Valorem stamp duty paid in a property transaction?
It is usually paid when signing the formal agreement of sale and purchase. But sometimes, it also depends on the period of time between signing the preliminary and formal agreements.
