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    Home > Frequently Asked Questions  > Illustrative examples of the application and computation of AVD

1.

Q:

Mr Chan is a Hong Kong Permanent Resident (HKPR) and does not own any residential property in Hong Kong.  On 1 March 2013, he entered into a provisional agreement for sale and purchaser (PASP) to acquire a residential property at a purchase price of $3M.   What is the amount of AVD payable?

  

A:

Since Mr Chan does not own any other residential property in Hong Kong at the time of acquisition of the subject property, the old AVD rates will apply.  The AVD payable is $45,000 ($3M x 1.5%).

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2.

Q:

Mr Lee is a HKPR and owns a residential property (the first property) in Hong Kong.  On 1 March 2013, he entered into a PASP to acquire another residential property (the second property) at the purchase price of $3M.  The formal agreement for sale and purchase (ASP) was signed on 30 March 2013.    What is the amount of AVD payable for the acquisition of the second property?

  

A:

Since Mr Lee owns another residential property in Hong Kong at the time of acquisition of the second property, the New AVD rates will apply.  The AVD payable is $90,000 ($3M x 3%).

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3.

Q:

Same as Example 2, but the PASP for acquisition of the second property was entered into on 1 February 2013.   What is the amount of AVD payable for the acquisition of the second property?

  

A:

In this case, the second property is regarded as having been acquired on 1 February 2013, the date of the PASP.  Hence, the old AVD rates will apply.  The AVD payable is $45,000 ($3M x 1.5%).

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4.

Q:

Mr Wong, a HKPR, and his spouse Ms Cheung, jointly purchased a residential property on 1 March 2013 at a purchase price of $4M.  Ms Cheung is not a HKPR.  Neither Mr Wong nor Ms Cheung owns any residential property in Hong Kong.  What is the amount of AVD payable?

  

A:

The old AVD rates apply as the residential property was acquired by close relatives (i.e. spouse, parents, children, brothers and sisters) jointly who do not own other residential property, and one of them is a HKPR.  The AVD payable is $90,000 ($4M x 2.25%).

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5.

Q:

Same as Example 4 but Ms Cheung owns another residential property in Hong Kong when she and Mr Wong acquired the residential property (the second property).  What is the amount of AVD payable for the acquisition of the second property?

  

A:

Since one of the purchasers, i.e. Ms Cheung, owns another residential property in Hong Kong at the time of acquisition of the second property, the New AVD rates will apply.  The AVD payable is $180,000 ($4M x 4.5%).

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6.

Q:

Same as Example 4 but Mr Wong and Ms Cheung are not close relatives.  What is the amount of stamp duty payable?

  

A:

If a residential property is jointly acquired by a HKPR and a non-HKPR, who is not a close relative of the HKPR, the New AVD rates will apply.   In the above situation, the amount of AVD payable is $180,000 (i.e. 4M x 4.5%).   Furthermore, since Ms Cheung is a non-HKPR and not a close relative of Mr Wong, the PASP is also chargeable with Buyer’s Stamp Duty (BSD) of $600,000 ($4M x 15%).

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7.

Q:

Mr Au is a HKPR and does not own any residential property in Hong Kong.  On 1 March 2013, he entered into an agreement for sale to acquire a residential property at a purchase price of $22M.  On 30 March 2013, the name of his spouse Ms Lau, who already owned a residential property in Hong Kong, was added in the assignment as one of the joint owners of the property.  What is the amount of AVD payable?

  

A:

The agreement will be charged with AVD of $935,000 ($22M x 4.25%) at the old rates.  As for the assignment, since Ms Lau already owned a residential property in Hong Kong, it will be chargeable with AVD, at the old rates, which is computed by reference to the stated consideration or the value of the property, whichever is the higher, less part of the stamp duty representing the share of the interest of Mr Au in the property.  Accordingly, AVD of $467,500 [($22M x 4.25%) x 50%] will be charged on the assignment.

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8.

Q:

Same as Example 7, but Ms Lau does not own any other residential property in Hong Kong.  What is the amount of AVD payable?

  

A:

The agreement will be charged with AVD of $935,000 ($22M x 4.25%) as aforesaid.  As for the assignment, since Mr Au and Ms Lau are close relatives and Ms Lau does not own any other residential property, it will not attract any AVD; it will be charged with a fixed duty of $100 only.

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9.

Q:

Mr Liu is a HKPR and does not own any residential property in Hong Kong.  On 1 March 2013, he entered into a PASP to acquire a residential property at a purchase price of $7M.  He nominated his spouse Ms Kok, who already owned a residential property in Hong Kong, to enter into the ASP as the sole purchaser.  What is the amount of AVD payable?

  

A:

The PASP will be charged with AVD of $262,500 ($7M x 3.75%) at the old rates.  As for the ASP, since Ms Kok already owned a residential property in Hong Kong, AVD of $262,500, at the old rates, will be payable on that instrument.

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10.

Q:

Same as Example 9, but Ms Kok does not own any other residential property in Hong Kong.  What is the amount of AVD payable?

  

A:

The PASP will be charged with AVD of $262,500 ($7M x 3.75%) as aforesaid.  As for the ASP, since Mr Liu and Ms Kok are close relatives and Ms Kok does not own any other residential property, it will not attract any AVD; it will be charged with a fixed duty of $100 only.

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11.

Q:

Mr Chiu is a HKPR and owned a residential property in Hong Kong.  On 1 March 2013, he entered into an agreement for sale to acquire a residential property at a purchase price of $22M.   By an assignment dated 1 April 2013 (the First Assignment), the property was assigned to him.   By another assignment dated 1 May 2013 (the Second Assignment), he assigned the property into the joint names of himself and his spouse Ms Mak, who already owned another residential property.   What is the amount of AVD payable?

  

A:

The agreement for sale will be charged with AVD of $1,870,000 ($22M x 8.5%) at the New AVD rates.  The First Assignment will be charged with a fixed duty of $100.  The assignment of the property (the Second Assignment) into the joint names of Mr Chiu and Ms Mak will have the effect of disposing of half of the interest in the property.  Assuming that there is no change in the value of the property, since Mr Chiu and Ms Mak are close relatives and Ms Mak already owned another residential property, the old AVD rates will apply.   In such a case, AVD of $412,500 [($22M x 50%) x 3.75%] will be charged on the Second Assignment.

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12.

Q:

Mr Tang and Ms Fong, both are HKPRs, entered into a PASP on 1 March 2013 to acquire a residential property at a purchase price of $5M from a vendor who has held the property for more than 3 years.  On 30 March 2013, the name of Ms Ho, a non-HKPR, was added in the ASP as one of the joint owners.  Ms Ho is not a close relative of Mr Tang or of Ms Fong.  All three persons do not own any other residential property in Hong Kong.  What is the amount of stamp duty payable?

  

A:

By adding the name of Ms Ho in the ASP, Mr Tang and Ms Fong have disposed of part of the residential property within 6 months from the date of acquisition and Ms Ho has acquired that part of the property from Mr Tang and Ms Fong.  As Ms Ho is not a close relative of both Mr Tang and Ms Fong, the New AVD, Special Stamp Duty (SSD) and BSD will apply, which are computed as follows:

Document
 
Nature of stamp duty
 
Amount ($)
 
PASP AVD (old) $150,000 ($5M x 3%)
ASP AVD (New) $100,000 [($5M x 6%) x 1/3]
ASP SSD $333,334 ($5M x 1/3 x 20%)
ASP BSD $750,000 ($5M x15%)

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13.

Q:

Mr Wan is a HKPR who owned a residential property (the first property) in Hong Kong.  On 1 March 2013, he entered into a PASP to acquire another residential property (the second property) at a purchase price of $6M.   On 15 August 2013, he entered into a PASP to dispose of the first property.  Can Mr Wan claim for a partial refund of the AVD paid?

  

A:

Since Mr Wan owned another residential property in Hong Kong at the time of acquisition of the second property, the New AVD rates will apply.  The AVD payable for acquisition of the second property is $360,000 ($6M x 6%).  However, Mr Wan can apply for a refund of part of the stamp duty paid if the first property was sold within 6 months from the date on which he acquired the second property.  The application can be made upon the completion of the disposal of the first property.  In the above situation, the refund amount is $180,000 ($360,000 – $6M x 3%).  Note that there is a general time limit of 2 years for claiming refunds, from the date of execution of the PASP for acquiring the second property (i.e. from 1 March 2013).

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14.

Q:

Same as example 13, but the PASP for disposal of the first property was entered into on 15 September 2013.  Can Mr Wan claim for a partial refund of the AVD paid?

  

A:

In the above situation, no stamp duty will be refundable as the first property was sold more than 6 months from the date on which the second property was acquired.

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15.

Q:

Same as example 13, but on 1 March 2013, Mr Wan owned more than one residential property in Hong Kong.  Can Mr Wong claim for a partial refund of the AVD paid?

  

A:

In the above situation, no stamp duty will be refundable as Mr Wan owns more than one residential property in Hong Kong at the time of acquisition of the new property.  The proposed concession for “change of residential property” does not apply.

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