Understanding stamp duty in Hong Kong

Stamp Duty Hong Kong Guide

Stamp duty is a tax on specific documents, principally those transferring Hong Kong immovable property or stock. The Stamp Duty Ordinance (Cap. 117) governs this duty, which must be paid to the Stamp Duty Office for a document to be legally effective. An unstamped instrument of transfer cannot be registered or used as court evidence.

Hong Kong Stamp Duty on Shares

Transferring Hong Kong stock attracts ad valorem stamp duty of 0.1% from the buyer and 0.1% from the seller, calculated on the higher of the consideration or the shares' value. A fixed HK$5 duty is also payable on the instrument of transfer. The buyer and seller execute bought and sold notes. The instrument of transfer then goes to the Stamp Duty Office for stamping before the company updates its register of members.

Hong Kong Property Stamp Duty

Hong Kong immovable property transfers face multiple layers of stamp duty. Basic ad valorem stamp duty applies to the consideration or the property's value, whichever is higher. Further duties include Buyer's Stamp Duty for non-resident purchasers and Special Stamp Duty on residential properties resold within a short holding period. Rates vary by the purchaser's status and the property's value.

Stamp Duty Office Hong Kong

The Stamp Duty Office sits within the Inland Revenue Department. It assesses duty, collects payment, and stamps documents. An instrument of transfer must be lodged for stamping within the prescribed time to avoid penalties. The office also processes stamp duty refund applications and issues rulings on payable duty.

Instrument of Transfer Stamp Duty Hong Kong

The instrument of transfer is the legal document that effects a change of ownership for shares or property. For shares, the instrument usually follows the form prescribed by the Stock Exchange of Hong Kong. This document, with the bought and sold notes, must be presented to the Stamp Duty Office for stamping. The duty must be paid before the transfer can be registered.