In brief

In the Chief Executive's 2023 Policy Address ("Policy Address"), delivered on 25 October 2023, the Hong Kong Government announced a reduction of the stamp duty rates for share transfers and a number of stamp duty related changes in respect of sales and purchases of residential property.


Contents

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.

Copyright © 2024 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.