On 19 April 2024, the Stamp Duty (Amendment) Ordinance 2024 (2024 Amendment Ordinance) was gazetted to remove all demand-side management measures for residential properties.^[1] These measures covered a wide range of property transaction-related initiatives aimed at reshaping and boosting property transactions and fostering a more favourable environment for both buyers and sellers in Hong Kong.

The measures include: (i) replacing the existing flat rate of ad valorem stamp duty payable on certain instruments dealing with residential properties with a new range of rates identical to those for nonresidential properties, and (ii) lowering the rate of special stamp duty (SSD), buyer’s stamp duty (BSD) and new residential stamp duty (NRSD) payable on certain instruments dealing with residential properties to 0 percent.

All the amendments became effective from 28 February 2024.

The 2024 Amendment Ordinance bolsters investment appeal, thereby attracting a broader spectrum of investors. This reduction in costs can stimulate increased market activity, encouraging both buyers and sellers to engage in property transactions, which leads to a more dynamic and vibrant real estate market. Moreover, aligning the stamp duty rates for residential properties with those for non-residential properties enhances the investment appeal, attracts more investors and potentially drives economic growth.

For detailed provisions, please refer to sections below.

Removal of Flat Rates of Ad Valorem Stamp Duty

Prior to 28 February 2024, a flat rate of 15 percent or 7.5 percent of ad valorem stamp duty, as the case may be, was applied on instruments of residential property executed between 5 November 2016 and 27 February 2024. With effect from 28 February 2024, buyers of residential properties are only required to pay ad valorem stamp duty under Scale 2 (ranging from HK$100 for properties under HK$3 million up to 4.25 percent of the sale price for property having a consideration over $21,739,120). This scale is applicable to instruments of residential property executed by permanent and non-permanent Hong Kong residents and irrespective of whether they own other residential properties in Hong Kong at the time of acquisition.

Removal of BSD and NRSD

Prior to 28 February 2024, non-permanent Hong Kong residents were required to pay BSD of 7.5 percent on the consideration or market value of the property (whichever is higher) for purchase of a residential property executed on or after 25 October 2023.

Also, NRSD was required to be paid at a rate of 7.5 percent by non-permanent Hong Kong residents or Hong Kong permanent residents who own other residential properties in Hong Kong at the time of acquisition.

Post 28 February 2024, no BSD and NRSD is required to be paid, allowing non-permanent Hong Kong residents and relevant Hong Kong permanent residents to purchase residential properties with no extra taxes.

Removal of SSD

Prior to 28 February 2024, residential property owners were required to pay SSD up to 20 percent on the consideration or market value of the property (whichever is higher), if the property was sold within two years from its acquisition.

Currently, SSD has been completely removed, abolishing any minimum holding period for residential properties being disposed of after 28 February 2024. Any instrument executed on or after 28 February 2024 for the sale and purchase or transfer of residential property is no longer subject to SSD. 

How We Can Support You

Please feel free to reach out to us at A&M if you have any questions or would like to discuss any aspects of the ordinance.