STAMP DUTY
Stamp Duty in Hong Kong is calculated based on the transaction price of the property sold. This is capped at 3.75% for the higher end transactions at which institutional investors tend to invest.
Stamp duty is either a fixed fee or is calculated ad valorem depending on the nature of the transaction. It is payable on:
- Leases, assignments and conveyances of immovable property.
- The transfer of shares or marketable securities
- The transfer of bearer instruments (being instruments under which ownership is transferred through physical delivery).
2 separate rates of stamp duty are payable on immovable property:
- The Conveyance of a Freehold or the Assignment of a Leasehold: The rate of stamp duty is progressive and varies from HKD100 to 3.75% if the value of the transferred interest is more than HKD6,720,000. The 2007 Finance bill reduced the stamp duty rate on transactions of properties with a value between HKD1 million and HKD2 million from 0.75% to a fixed amount of HKD100.
- The Granting of a Short-Term Lease: The stamp duty rate is progressive and varies between .25% and 1% of the annual rental value depending on whether the lease is for less than one year or more than 3 years. Any agreement which increases the rent reserved by a chargeable stamped lease is itself chargeable to stamp duty in respect of the additional rent which it makes payable.
Here are the current Stamp Duty rates as published by the Inland Revenue of Hong Kong:
