The following FAQs are prepared based on the Government’s current proposals, which have to be put into effect through the enactment of legislation and are subject to amendment during the legislative process.
What amendments will be made to the exemption arrangement for Hong Kong permanent resident buyers under the new residential stamp duty?
The Government proposed that, unless specifically exempted or otherwise provided in the law, all instruments executed on or after 12 April 2017 for the sale and purchase or transfer of more than 1 residential property under one instrument, will be subject to the proposed new AVD flat rate at 15%. Thus, acquisition of more than 1 residential property under one single instrument will be subject to the proposed new AVD flat rate at 15%, even if it is made by a Hong Kong permanent resident who is acting on his/her own behalf and is not a beneficial owner of any other residential property in Hong Kong at the time of acquisition.
What documents will the Stamp Office base on to determine whether the subject property is a single property?
In general, the Stamp Office will refer to the building plans approved by the Building Authority, the deed of mutual covenant, the occupation permit and other documents, such as the developer’s sale brochures, to determine whether the subject property under an instrument is a single property.
Under what circumstances will two adjacent residential units be treated as one single property?
Two adjacent units will be regarded as a single property if the partition wall dividing the two units has been demolished and a building plan for the alterations works has been approved by the Building Authority. In other words, if there is no approved building plan for the alterations works, the two units will be treated as two separate properties.
If after acquiring two adjacent uncompleted units from the developer, the purchaser requests the developer not to construct the partition wall. Will the two units be regarded as one single property?
If at the time when the two units are acquired, the building plan shows that they are separate units, the properties will be regarded as two residential properties although no partition wall will be built subsequent to the acquisition. In such circumstance, the proposed AVD rate at 15% will apply.
Will an instrument for the acquisition of more than 1 residential property be partly chargeable with AVD at scale 2 rates and partly at 15% if the purchaser/transferee is a Hong Kong permanent resident acting on his/her own behalf and not a beneficial owner of any other residential property in Hong Kong?
No, the whole instrument will be chargeable with AVD at 15%.
What are the transitional arrangements for stamping the instruments dealing with acquisition of more than 1 residential property?
Before the proposed legislation is enacted, instruments chargeable with AVD at the proposed new AVD rate will be stamped by reference to Scale 1 rates or Scale 2 rates (as the case may be) first. The additional AVD, representing the difference between AVD payable at the proposed new AVD rate and Scale 1 rates or scale 2 rates (as the case may be), will have to be paid within 30 days commencing immediately after the date of gazettal of the enacted legislation.