Originally published 26 February 2010
Keywords: revised stamp duty, sale, transfer, property, Hong Kong, new stamp duty rates
Revised Stamp Duty Rates
With reference to the Financial Secretary's 2010-11 Budget delivered on 24 February 2010, the stamp duty rates on transactions of properties valued over HK$20 million will be increased with effect from 1 April 2010.
The New Stamp Duty Rates on Sale or Transfer of Immovable Property in Hong Kong effective from 1 April 2010 are as follows:
|
Amount or value of the consideration |
Rate (HK$) |
|
|
Exceeds (HK$) |
Does not exceed (HK$) |
|
|
$2,000,000 |
$100 |
|
|
$2,000,000 |
$2,351,760 |
$100 + 10% of excess over $2,000,000 |
|
$2,351,760 |
$3,000,000 |
1.5% |
|
$3,000,000 |
$3,290,320 |
$45,000 + 10% of excess over $3,000,000 |
|
$3,290,320 |
$4,000,000 |
2.25% |
|
$4,000,000 |
$4,428,570 |
$90,000 + 10% of excess over $4,000,000 |
|
$4,428,570 |
$6,000,000 |
3% |
|
$6,000,000 |
$6,720,000 |
$180,000 + 10% of excess over $6,000,000 |
|
$6,720,000 |
$20,000,000 |
3.75% |
|
$20,000,000 |
$21,739,120 |
$750,000 + 10% of excess over $20,000,000 |
|
$21,739,120 |
4.25% |
|
New Stamp Duty Rates Apply to All Kinds of Immovable Property
Please note that the new stamp duty rates will apply to all kinds of immovable properties, namely residential and non-residential properties.
The effective date (i.e. 1 April 2010) applies to the execution date of the chargeable instrument, i.e. (i) agreement for sale and purchase for residential property, and (ii) assignment for non-residential property.
Furthermore, a chargeable agreement of residential property valued over HK$20 million executed on and after 1 April 2010 will not be eligible to apply for a deferral of the payment of stamp duty.
Some examples of how the old and new rates of stamp duty will apply and when a chargeable agreement will not be eligible for a deferred payment application are given in the attached link to the Government website:
FAQ in respect of the stamp duty on transactions of property valuing over HK$20 million
http://www.ird.gov.hk/eng/faq/budget_stamp.htm
Those who have recently contracted to purchase property or are considering purchasing property should consider the dates of execution of the Provisional Agreement, Formal Agreement and the Assignment in order to take advantage of the old stamp duty rates.
We also attach the following link to the Government website on the stamp duty rates for sale or transfer or lease of immovable property in Hong Kong or transfer of Hong Kong stock for readers' ease of reference:
http://www.gov.hk/en/residents/taxes/stamp/stamp_duty_rates.htm
Learn more about our Hong Kong office and Real Estate practice.
Visit us at www.mayerbrown.com
Copyright 2010. JSM, Mayer Brown International LLP and/or Mayer Brown LLP. All rights reserved. Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: JSM, a Hong Kong partnership, and its associated entities in Asia; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and Mayer Brown LLP, a limited liability partnership established in the United States. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.
This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.
