Among other measures introduced in the Policy Address to reduce the transaction costs for Hong Kong share transfers, the ad valorem stamp duty rate on Hong Kong share transfers will be reduced from 0.13% to the previously applicable rate of 0.1% of the amount of the consideration, or the value of the shares transferred (whichever is higher), on each sale and purchase of Hong Kong shares. In other words, a total of 0.2% (as opposed to 0.26%) will be paid on the transfer.
The Stamp Duty (Amendment) (Stock Transfers) Bill 2023 was gazetted on 25 October 2023 and is expected to come into force by the end of November 2023.
Separately, the Hong Kong Government also announced that it will implement the following stamp duty related changes in respect of sales and purchases of residential property:
- The holding period during which Special Stamp Duty (SSD) will apply will be shortened from three years to two years. A property owner who disposes of their property two years after acquiring it will no longer need to pay SSD.
- Buyer’s Stamp Duty (BSD) and the New Residential Stamp Duty (NRSD) will be reduced by half, from 15% to 7.5%.
- A stamp duty suspension arrangement will be introduced for eligible incoming talents who have entered Hong Kong under designated talent admission schemes ("Incoming Talent") and acquired residential property. Under this arrangement, BSD and NRSD will not need to be paid at the time of acquiring a residential property, and will only need to be paid if the Incoming Talent fails to subsequently become a Hong Kong permanent resident (the Incoming Talent will need to be resident in Hong Kong for not less than seven years to be eligible for permanent residency) . This arrangement will apply for any sale and purchase agreement of residential property entered into from 25 October 2023.