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New Provisions to Lessen Stamp Tax Duties in Hong Kong

New Provisions to Lessen Stamp Tax Duties in Hong Kong

The Stamp Duty Amendment, published in the Official Gazette on January 19th will ease the stamp duty applicable to residents in the Special Administrative Region. This is part of a series of changes brought to this tax, means to change and improve the conditions on the housing market. 

The stamp duty is one of the taxes applicable both to companies and individuals. One of our Hong Kong company formation agents can give you more information.

The new 2018 Stamp Duty Ordinance

The change brought by the January 2018 Stamp Duty Ordinance concerns the ad valorem duty. The Scale 1 of this ad valorem duty will have two values: one at a flat rate of 15 percent, called Part 1, and one at the original Scale rates, called Part 2. Scale 1 will apply differently to instruments of residential property. For this purpose, Part 2 of Scale 1, which has lower rates, will apply to instruments that involve only non-residential properly. 

What’s more, under the 2018 changes, taxpayers do not have a 12 months window during which they may claim a partial refund of the ad valorem stamp duty of they sell a home they own after they have purchased another property. This only applies to Hong Kong residents and prior to the 2018 Ordinance, the timeframe was only six months. Experts believe that out of the two measures enacted in January, this second one will have the highest impact on the market.

Stamp duty in Hong Kong

The ad valorem stamp duty is charged in case of immovable property lease, sale or transfer. It is imposed on the documents connected to these activities. Another situation in which stamp duty applies is for the transfer of shares. In this case, the tax has a value of 0.2 percent of the value of the transferred shares.

Our Hong Kong company formation agents can give you complete information on the Scale 1 stamp duty rates and any other details related to the manner in which this tax is imposed on residents. You can contact us for more information about taxation in Hong Kong.