Hong Kong Gazettes Stamp Duty Amendments

By ExpatBriefing.com Editorial 09 April, 2013

The Stamp Duty (Amendment) Bill 2013, which aims to implement the new measures that the Government announced on February 22 to further address the overheated property market, was gazetted in Hong Kong on April 5.

The measures are an increase in the ad valorem stamp duty (AVD) rates on transactions for residential and non-residential properties; and a bringing forward of the charging of AVD on non-residential property transactions from the conveyance on sale to the agreement for sale, to tally with the existing arrangement for residential properties.

The Government took those measures after an increase to the Special Stamp Duty (SSD) rate and its restriction period, and the introduction of a 15% Buyer's Stamp Duty (BSD) on resident properties purchased by those who are not Hong Kong permanent residents (HKPRs), in October last year, had had no lasting effect on property price inflation by early 2013.

With effect from February 23, 2013, the Government has doubled across the board the rates of existing AVD applicable to both residential and non-residential properties. For transactions valued at HKD2m (USD257,500) or below, the stamp duty will increase from HKD100 to 1.5% per cent of the consideration of the transaction.

A government spokesman said the new measures are applicable to all persons, except HKPRs, buying residential properties but who do not own any such property in Hong Kong on the date of acquisition.

"By further managing the demand for residential properties and combating short-term resale activities in respect of non-residential properties, we hope that the proposed new measures will help to address the overheated property market," the spokesman said.

"In drafting the Bill, with reference to the existing SSD and the proposed BSD regimes, we propose to grant exemptions from the enhanced AVD rates under specified circumstances," he added. "We also propose to put in place a refund mechanism for redevelopment projects and HKPRs who acquire a new residential property before disposing of their original one."

The Bill will be introduced into the Legislative Council on April 17, 2013.

A comprehensive report in our Intelligence Report series dealing with the issues raised by international property investment, and the possible taxation implications raised by such purchases, with an account of the likely (and some less obvious) potential countries for your consideration, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report15.asp

Tags: Expatriates | Tax | Investment | Real-estate Investment | Law | Real-estate | Offshore | Legislation | Tax Rates | Stamp Duty | Hong Kong | Legislation Amendments |


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