Properties in Hong Kong
Investing in Hong Kong real estate can be particularly rewarding for entrepreneurs as the demand in the market continues to grow.
Residential property as well as
office buildings are demanded by foreign investors in the city and those who want to
move to Hong Kong.
There are no restrictions on foreign property ownership in Hong Kong, however investors will have to observe and respect some basic laws and regulations such as the Buildings Ordinance, the Conveyancing and Property Ordinance, the Government Lease Ordinance, the Land Registration Ordinance, the Landlord and Tenant Ordinance or the Building Management Ordinance.
Our partner
lawyers in Hong Kong can help you understand the legal aspects of
purchasing real estate in the city.
Purchasing real estate in Hong Kong
All land in Hong Kong is owned by the state. This means that any land purchase and construction on that land is possible with a government lease which allows the developer to occupy and use parcels of the land for a certain government rent. Government leases are granted for a period of 50 years.
In Hong Kong, all documents concerning the ownership in land must be registered with the Land Registry. A real estate sale/purchase will need to be concluded with a written agreement. Before the final document is agreed upon, the two parties will usually sign a Provisional Agreement. A deposit is usually made and the Formal Agreement is concluded once the terms for the purchase have been agreed upon.
Although most
investors in Hong Kong will
purchase real estate directly, another method is to purchase shares in a
holding company that owns a building, rather than purchase the building itself. This method can have certain tax advantages. Our
company registration experts in Hong Kong can give you additional information about this procedure.
Taxes associated with real estate transactions in Hong Kong
When
purchasing or transferring real estate in Hong Kong, investors will need to
pay certain taxes. They include:
- the property tax: levied on owners of buildings in the city on income derived from renting the properties;
- the stamp duty: applicable on the sale of the property and usually payable by the buyer.
- the special stamp duty;
- the buyer’s stamp duty;
- the real estate agent’s fees and any legal fees.
