Hong Kong Stamp Duty
In Hong Kong, there are three types of stamp duties: 1) Ad Valorem Stamp Duty; 2) Special Stamp Duty; and 3) Buyer’s Stamp Duty.
1) Ad Valorem Stamp Duty
1.1 On Sale or Transfer of Immovable Property in Hong Kong
| On Sale or Transfer of Immovable Property in Hong Kong | From 1st April 2010 | Scale 2 |
| Instruments of residential property | On or after 23rd February 2013 but before 5th November 2016 | Part 2 of Scale 1 |
| Instruments of non-residential property | On or after 23th February 2013 | Part 2 of Scale 1 |
| Instruments of residential property | On or after 5th November 2016 | Rate of Part 1 of Scale 1 (15%) |
1.2 Stamp Duty – Hong Kong Tenancy
Lease, tenancy agreement and any other files with similar performance (including documents for duplicates and counterparts) (called the “Lease” here) are required to pay stamp duty. Landlords, tenants and any other persons who have executed the lease payment have to pay stamp duty.
Lease shall be stamped within 30 days after the date of signing. Lease commencement date and time for stamping has no association. A lease which is not stamped shall not be counted as evidence in civil proceedings, nor can it be used in any public officer or body corporate that shall be filed or acted with.
| Duration | Stamp Duty Rate |
|---|---|
| Not defined or is not fixed | 0.25% of yearly rent or rent of average term/td> |
| Lease period not exceeding 1 year | 0.25% of total rent payable |
| Exceeding 1 year but not exceeding 3 years | 0.5% of yearly rent or average annual rent |
| Exceeding 3 years | 1% of yearly rent or average annual rent |
| Moneys mentioned in the lease fee and the cost of construction fees | 4.25% (such as rent under the lease); otherwise the same as the sale of immovable property as payment of stamp duty |
| Duplicates and counterparts | HKD 5 for each |
1.3 Stamp duty – Transfer of Hong Kong securities
With effect from 1 September 2001, the sale or purchase of any securities is subject to Hong Kong stamp duty and it will be charged by the amount or value is calculated as follows :-
| Natures of Documents | Charges |
|---|---|
| Contract Notes for sale or purchase of any Hong Kong stock | For each invoice amount or 0.1% of value of the consideration |
| Voluntary disposition of transfer | $5 plus 0.2% of the value of transferable securities |
| Any other kind of assignment | $5 |
If such sale or purchase in Hong Kong is completed within 2 days after the transaction, it must pay stamp duty; if such sale or purchase is completed elsewhere, it must pay stamp duty within 30 days after the transaction.
2) Special Stamp Duty
| Holding Period (Residential property) | The property was acquired on or after 20 November 2010 and before 27 October 2012 | The property was acquired on or after 27th October 2012 |
|---|---|---|
| 6 months or less | 15% | 20% |
| More than 6 months but for 12 months or less | 10% | 15% |
| More than 12 months but for 24 months or less | 5% | 10% |
| More than 24 months but for 36 months or less | – | 10% |
3) Buyer’s Stamp Duty
With effect from 27 October 2012, unless specifically exempted, Buyer’s Stamp Duty (BSD) is payable on an agreement for sale or a conveyance on sale executed for the acquisition of any residential property. BSD is charged at 15% on the stated consideration or the market value of the property (whichever is the higher).
Documentation
Under the Stamp Duty Ordinance, Ch. 117, there is a certain amount of tax on several types of documents. They are:-
- Conveyance on Sale (Assignment)
- Residential Property Sale and Purchase Agreement
- Immovable Lease (Lease)
- Securities Assignment
Any person who wishes to use a document which is chargeable but without duly stamped for that instruments, that person shall be responsible for such stamp duty and is subject to penalty in respect of legal liability.
Overdue Stamp Duty – Fines
| Overdue | Fine |
|---|---|
| Not more than 1 month | 2 times the amount of stamp duty |
| More than 1 month, but not more than 2 months | 4 times the amount of stamp duty |
| Other cases | 10 times the amount of stamp duty |