Stamp Duty Rate - Four Seasons Property (Lantau) Limited

Stamp duty

Only apply for ‘First-time buyer’ – a permanent Hong Kong Residences as they do not own any property when they signing the Sales and Purchase Agreement.

Amount or value of the consideration		Rate
Exceeds	Does not exceeds
	$2,000,000	$100
$2,000,000	$2,351,760	$100+10% of the exceeds over $2,000,000
$2,351,760	$3,000,000	1.5%
$3,000,000	$3,290,320	$45,000+10% of the exceeds over $3,000,000
$3,290,320	$4,000,000	2.25%
$4,000,000	$4,428,570	$90,000+10% of the exceeds over $4,000,000
$4,428,570	$6,000,000	3%
$6,000,000	$6,720,000	$180,000+10% of the exceeds over $6,000,000
$6,720,000	$20,000,000	3.75%
$20,000,000	$21,739,120	$750,000+10% of the exceeds over $20,000,000
$21,739,120	-	4.25%

Special Stamp Duty (SSD)

The adjusted SSD will have three levels of regressive rates for different holding periods –

( i ) 20 per cent if the property has been held for six months or less;

( ii ) 15 per cent if the property has been held for more than six months but for 12 months or less; and

( iii ) 10 per cent if the property has been held for more than 12 months but for 36 months or less.

Buyer’s Stamp Duty(BSD)

The BSD will be charged at a flat rate of 15 per cent for all residential properties, on top of the existing stamp duty and SSD, if applicable, acquired by any person or entity, except a HKPR. Exemptions will be provided to certain transactions including, for example, those involving a HKPR and his or her close relatives who are not HKPR.

New Stamp Duty (Double Stamp Duty DSD)

On 22 February 2013, the Financial Secretary announced that the Government would amend the Stamp Duty Ordinance to adjust the ad valorem stamp duty (AVD) rates. The new AVD rates are as follows.

The new stamp duty rates will not apply to Hong Kong permanent resident buyers who are not beneficial owners of any other residential property in Hong Kong at the time of acquisition of a residential property.

(Where the stamp duty calculated includes a fraction of $1, round-up the duty to the nearest $1.)

Amount or value of the consideration		Rate
Exceeds	Does not exceed	Rate
-	$2,000,000	1.5%
$2,000,000	$2,176,470	$30,000 + 20% of excess over $2,000,000
$2,176,470	$3,000,000	3%
$3,000,000	$3,290,330	$90,000 + 20% of excess over $3,000,000
$3,290,330	$4,000,000	4.5%
$4,000,000	$4,428,580	$180,000 + 20% of excess over $4,000,000
$4,428,580	$6,000,000	6%
$6,000,000	$6,720,000	$360,000 + 20% of excess over $6,000,000
$6,720,000	$20,000,000	7.5%
$20,000,000	$21,739,130	$1,500,000 + 20% of excess over $20,000,000
$21,739,130	-	8.5%

AVD at Scale 1 and Scale 2
The Stamp Duty (Amendment) (No. 2) Ordinance 2014 (Amendment Ordinance) was gazetted on 25 July 2014. The Amendment Ordinance provides that the ad valorem stamp duty (AVD) payable on certain instruments dealing with immovable properties executed on or after 23 February 2013 (the Effective Date) shall be computed at higher rates (Scale 1), unless specifically exempted or provided otherwise. The major exception, amongst others, is where the property is a residential property, and the purchaser/transferee is a Hong Kong permanent resident (HKPR) who is acting on his/her own behalf and does not own any other residential property in Hong Kong at the time of acquisition. In such case, the instrument will be subject to AVD at lower rates (Scale 2). The Amendment Ordinance also advances the timing for charging AVD on non-residential property transactions from the conveyance on sale to the agreement for sale executed on or after the Effective Date. Please see the FAQs for AVD - Scale 1 and Scale 2.

Proposed new AVD rate
On 4 November 2016, the Government announced that the Stamp Duty Ordinance would be amended to increase the AVD rates for residential property transactions to a flat rate of 15%. Under the Government’s proposal, any instrument executed on or after 5 November 2016 for the sale and purchase or transfer of residential property, unless specifically exempted or provided otherwise, will be subject to the proposed new AVD rate (a flat rate at 15% of the consideration or value of the residential property, whichever is the higher). The exemptions and exceptions introduced through the 2014 Amendment Ordinance will not be affected. Thus, a HKPR acquiring a residential property where he/she is acting on his/her own behalf and does not own any other residential property in Hong Kong at the time of acquisition will continue to be subject to AVD at Scale 2 rates. The refund mechanism under the existing regime for HKPR buyer who changes his/her single residential property will also be retained. The amendment will not affect transactions relating to non-residential properties either. Please see the FAQs for AVD - proposed new AVD rate.

The FAQs are prepared based on the Government’s current proposal, which has to be put into effect through the enactment of legislation and is subject to amendment during the legislative process.

Q & A for ad valorem stamp duty (AVD) - at Scale 1 and Scale 2
http://www.ird.gov.hk/eng/faq/avd.htm

Illustrative examples of the application and computation of AVD - at Scale 1 and Scale 2
http://www.ird.gov.hk/eng/faq/avdexample.htm

Q & A for ad valorem stamp duty (AVD) - Proposed new AVD rate
http://www.ird.gov.hk/eng/faq/avdnew.htm

Illustrative examples of the application and computation of AVD - Proposed new AVD rate
http://www.ird.gov.hk/eng/faq/avdnewexample.htm

Remarks:

The Hong Kong Government proposes to relax the "six-month" timeframe for owners having acquired a new residential property before disposing of their original one. To specify the "six-month" timeframe under the current arrangement in the Bill be adjusted to commence from the conveyance on sale instead of the agreement for sale and purchase of the newly acquired property.

Also, the government proposes a slight modification to the "two-year" timeframe for application to IRD for stamp duty refund as specified in the Bill. While maintaining the two-year application timeframe after the execution of an agreement for sale and purchase of the newly acquired property, and include a new clause to allow for application within two months from the conveyance on sale of the original residential property, whichever is the later. This is meant to enable buyers of changing properties, including those who acquire uncompleted flats, to apply for refund after completion of transactions to cater for actual circumstances.

Another adjustment is related to the exemption arrangement in respect of acquisition of a residential property with a car parking space. In accordance with the Bill and the prevailing practice by the Stamp Office, when a HKPR acting on his or her behalf in acquiring a residential property and a car parking space by a single instrument, the concerned residential property in the transaction can be exempted from the doubled AVD while the car parking space will not be exempted given that it is a non-residential property.

Hong Kong Stamp Duty Rate - Rent

Stamp duty is calculated at rates which vary with the term of the lease as follows:

Term		Rate
Not defined or is uncertain		0.25% of the yearly or average yearly rent (Note 1)
Exceeds	Does not exceeds
-	1 year	0.25% of the total rent payable over the term of the lease (Note 1)
1 year	3 year	0.5% x of the yearly or average yearly rent (Note 1)
3 year	-	1% x of the yearly or average yearly rent (Note 1)
Key money, construction fee etc. mentioned in the lease		3.75% of the consideration if rent is also payable under the lease. Otherwise, same duty as for a sale of immovable property
Duplicate or counterpart		HK$5 each

Please note that any deposit which may be mentioned in the lease will not be taken into account in assessing the stamp duty.
Please click on the following link for further details:http://www.gov.hk/en/residents/taxes/stamp/stamp_duty_rates.htm

Note 1: The yearly rent/average yearly rent/total rent has to be rounded-up to the nearest $100.