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The Stamp Duty (Amendment) Ordinance 2024 ("2024 Amendment Ordinance") was published in the Gazette on 19 April 2024. Under the 2024 Amendment Ordinance, any instrument executed on or after 28 February 2024 for the sale and purchase or transfer of residential property is no longer subject to BSD. The following Illustrative examples of the application and computation of BSD are only applicable to residential properties acquired between 27 October 2012 and 27 February 2024.
1.
Q:
Mr. Chan, a non Hong Kong Permanent Resident, signed a provisional agreement for sale and purchase to acquire a residential property on 1 November 2012 at price of $3M. The formal agreement for sale was signed on 15 November 2012. Will Mr. Chan be liable to pay BSD?
A:
Since the residential property was acquired by Mr. Chan on or after 27 October 2012 and he is not a Hong Kong Permanent Resident, he has to pay BSD for the transaction and the BSD payable is $450,000 ($3M x 15%).
2.
Q:
If the abovementioned Mr. Chan signed a provisional agreement for sale and purchase to acquire a residential property on 15 October 2012 but the formal agreement for sale was signed on 15 November 2012. Will he be liable to pay BSD?
A:
Since the residential property was acquired by Mr. Chan before 27 October 2012, the transaction is not chargeable with BSD.
3.
Q:
Mr. Lee, a Hong Kong permanent resident (HKPR), and his spouse Ms. Cheung jointly purchased a residential property on 1 November 2012 at a price of $4M. Ms. Cheung is not a HKPR. Is the transaction chargeable with BSD?
A:
Acquisition of residential properties by a HKPR jointly with his or her close relatives (i.e. spouse, parents, children, brothers and sisters) is not chargeable with BSD. Mr. Lee and Ms. Cheung are not required to pay BSD for the transaction.
4.
Q:
Mr. Wong and Mr. Ho jointly purchased a residential property on 1 November 2012 at a price of $4M. Mr. Wong is a HKPR whereas Mr. Ho is not. They are not close relatives. What is the amount of BSD payable?
A:
If a residential property is acquired by a HKPR and a non HKPR jointly as joint tenants or tenants-in-common and they are not close relatives, the BSD rate will apply on the stated consideration or value of the property, whichever is the higher, regardless of the non HKPR's share in the property. In the above situation, the amount of BSD payable is $600,000 (i.e. $4M x 15%).
5.
Q:
Mr. Lee, who is a HKPR entered into a provisional agreement for sale and purchase on 1 November 2012 to acquire a residential property at a price of $5M. On 30 November 2012, Ms. Cheung was added in the formal agreement for sale and purchase as one of the joint tenants. Ms. Cheung is neither a HKPR nor a close relative of Mr. Lee. Will Mr. Lee and Ms. Cheung be liable to pay BSD? What is the amount of BSD payable?
A:
In the above situation, Ms Cheung has acquired part of the property from Mr. Lee. As Ms. Cheung is not the close relative of Mr. Lee, there will be no exemption of BSD. They are liable to pay BSD on the full amount of the consideration or the value of the property, whichever is the higher. The amount of BSD payable is $750,000 (i.e. $5M x 15%).
6.
Q:
Mr. Lee, who is a HKPR entered into an agreement for sale and purchase on 1 November 2012 to acquire a residential property at a price of $5M. On 30 November 2012, Ms. Cheung was added in the assignment as one of the joint tenants. Ms. Cheung is neither a HKPR nor the close relative of Mr. Lee. Will Mr. Lee and Ms. Cheung be liable to pay BSD? What is the amount of BSD payable?
A:
In the above situation, Ms Cheung has acquired part of the property from Mr. Lee. As Ms. Cheung is not the close relative of Mr. Lee, there will be no exemption of BSD. They are liable to pay BSD on the full amount of the consideration or the value of the property, whichever is the higher. The amount of BSD payable is $750,000 (i.e. $5M x 15%)