📋 Key Facts at a Glance
- Estate Duty Abolished: Hong Kong abolished estate duty on February 11, 2006 – no inheritance tax applies to deaths occurring on or after this date
- Stamp Duty Exemption: Property inherited through a will, intestacy, or right of survivorship is completely exempt from stamp duty
- Simplified Tax Regime: As of February 28, 2024, all special property duties (BSD, SSD, NRSD) have been abolished – only Ad Valorem Stamp Duty applies
- No Inheritance Tax: Hong Kong imposes no inheritance tax, gift tax, or capital gains tax, making it highly favorable for wealth transfer
- Current AVD Rates: Ad Valorem Stamp Duty ranges from HK$100 (properties up to HK$3 million) to 4.25% (properties exceeding HK$21,739,120)
- Grant Required: A Grant of Probate or Letters of Administration is typically needed to transfer property from a deceased’s estate
What happens when you inherit a property in Hong Kong? Do you face hefty stamp duty bills like property buyers? The good news is that Hong Kong offers one of the world’s most favorable inheritance tax environments. Since abolishing estate duty in 2006 and simplifying its property tax regime in 2024, inheriting property has become remarkably straightforward and tax-efficient. This guide explains exactly how stamp duty applies (or doesn’t apply) to inherited property, what documentation you need, and how to navigate the process smoothly.
Hong Kong’s Tax-Friendly Inheritance Landscape
Hong Kong stands out globally for its favorable tax treatment of inherited wealth. The territory abolished estate duty (inheritance tax) on February 11, 2006, making it one of the most attractive jurisdictions for estate planning and intergenerational wealth transfer. This means that when someone passes away in Hong Kong, their beneficiaries receive the full value of the estate without any tax deduction at the point of inheritance.
What Hong Kong Does NOT Tax
- Capital gains: No tax on property appreciation when inherited or sold
- Dividends: No withholding tax on dividends received
- Inheritance/estate duty: Abolished since February 2006
- Gift tax: No tax on gifts between individuals
- Sales tax/VAT/GST: Hong Kong has no consumption taxes
Stamp Duty Exemption for Inherited Property
While stamp duty typically applies to property transactions in Hong Kong, inherited property enjoys a special exemption. This means that when you receive property through inheritance, you don’t pay any stamp duty on the transfer from the deceased’s estate to you as the beneficiary.
Qualifying Inheritance Methods
The stamp duty exemption applies to property transferred through these three methods:
| Transfer Method | Description | Stamp Duty Treatment |
|---|---|---|
| Testamentary Disposition | Transfer under a valid will | Exempt – No stamp duty payable |
| Intestacy | Transfer under the Intestates’ Estates Ordinance when no valid will exists | Exempt – No stamp duty payable |
| Right of Survivorship | Automatic transfer to surviving joint tenant(s) | Exempt – No stamp duty payable; no grant required |
Current Stamp Duty Framework (2024-2025)
Hong Kong’s stamp duty regime underwent significant simplification in 2024. As of February 28, 2024, all special property duties have been abolished, leaving only Ad Valorem Stamp Duty (AVD) for property transactions.
Ad Valorem Stamp Duty (AVD) Rates
| Property Value | Stamp Duty Rate |
|---|---|
| Up to HK$3,000,000 | HK$100 |
| HK$3,000,001 – HK$3,528,240 | HK$100 + 10% of excess |
| HK$3,528,241 – HK$4,500,000 | 1.5% |
| HK$4,500,001 – HK$4,935,480 | 1.5% to 2.25% |
| HK$4,935,481 – HK$6,000,000 | 2.25% |
| HK$6,000,001 – HK$6,642,860 | 2.25% to 3% |
| HK$6,642,861 – HK$9,000,000 | 3% |
| HK$9,000,001 – HK$10,080,000 | 3% to 3.75% |
| HK$10,080,001 – HK$20,000,000 | 3.75% |
| HK$20,000,001 – HK$21,739,120 | 3.75% to 4.25% |
| Above HK$21,739,120 | 4.25% |
Abolished Duties (as of February 28, 2024)
The 2024-25 Budget announced the cancellation of all demand-side management measures for residential properties. These duties no longer apply:
- Buyer’s Stamp Duty (BSD): Previously 15% on property acquisitions by non-Hong Kong Permanent Residents
- Special Stamp Duty (SSD): Previously 10-20% based on holding period (aimed at short-term speculation)
- New Residential Stamp Duty (NRSD): Previously 15% on residential property acquisitions by Hong Kong Permanent Residents owning other residential property
Probate and Administration Requirements
To legally transfer property from a deceased’s estate in Hong Kong, you typically need a Grant of Representation. This is a court document that confirms the authority of the executor or administrator to deal with the estate assets.
Types of Grants Required
| Type of Grant | When It Applies | Who May Apply |
|---|---|---|
| Grant of Probate | Deceased left a valid will naming an executor | Executor(s) named in the will |
| Letters of Administration (with Will Annexed) | Valid will exists but named executor is unable or unwilling to act | Close family members (according to priority order) |
| Letters of Administration | No valid will exists (intestacy) | Close family members (spouse has first priority) |
Exceptions to Grant Requirement
- Joint Tenancy: If property was owned as joint tenants, it automatically passes to the surviving joint tenant(s) upon proof of death with a death certificate – no grant required
- Small Estates: Under Section 15 of the Probate and Administration Ordinance, the Official Administrator may administer estates valued at HK$150,000 or less summarily without a grant application
Practical Scenarios and Considerations
| Scenario | Stamp Duty Treatment |
|---|---|
| Direct inheritance under will or intestacy to beneficiary | Exempt – No stamp duty payable |
| Transfer through right of survivorship (joint tenancy) | Exempt – No stamp duty payable; no grant required |
| Beneficiary inherits property then purchases another residential property | Inheritance: Exempt New purchase: Subject to AVD (beneficiary already owns property) |
| Beneficiary sells inherited property to third party | Sale transaction subject to AVD at current rates (paid by purchaser) |
| Transfer between close relatives as part of estate distribution | If in accordance with will/intestacy: Exempt If voluntary redistribution: May be subject to AVD (seek professional advice) |
Deeds of Family Arrangement
Recent Court of Appeal decisions have clarified that deeds of assent distributing property in accordance with intestacy laws do not attract stamp duty, representing a departure from previous Inland Revenue Department practice. However, if beneficiaries enter into voluntary arrangements to redistribute estate assets differently from what is specified in the will or intestacy laws, stamp duty implications may arise.
Step-by-Step Process for Inheriting Property
- Step 1: Determine if a Grant is Required
Check if the property was held as joint tenancy (no grant needed) or if the estate qualifies as a small estate under HK$150,000. - Step 2: Apply for Grant of Representation
Submit application to the Probate Registry of the High Court with required documents including original will (if any), death certificate, and Schedule of Assets and Liabilities. - Step 3: Wait for Grant Issuance
Processing typically takes 5-7 weeks once all requirements are satisfied and court fees paid. - Step 4: Register with Land Registry
Submit sealed copy of the Grant to the Land Registry to update property records and transfer legal title. - Step 5: Complete Transfer to Beneficiary
Execute deed of assent or transfer document to formally transfer property to beneficiary.
✅ Key Takeaways
- Hong Kong abolished estate duty in 2006 – no inheritance tax applies to deaths occurring on or after February 11, 2006
- Property inherited through will, intestacy, or right of survivorship is completely exempt from stamp duty
- As of February 28, 2024, all special property duties (BSD, SSD, NRSD) have been abolished – only Ad Valorem Stamp Duty applies to property transactions
- A Grant of Probate or Letters of Administration is typically required to transfer property from a deceased’s estate, except for joint tenancies
- Beneficiaries who inherit residential property will be considered property owners for subsequent residential property acquisitions
- Recent court rulings confirm that assents in accordance with intestacy laws are not subject to stamp duty
- Processing time for grant applications is typically 5-7 weeks once all requirements are satisfied
- Professional legal and tax advice is essential for complex estate situations involving family arrangements or asset redistribution
Hong Kong offers one of the world’s most favorable environments for inheriting property, with no inheritance tax and stamp duty exemptions for direct inheritances. The 2024 simplification of property duties has made the system even more straightforward. While the process requires proper documentation and sometimes court grants, the tax benefits are substantial. For complex estates or situations involving family arrangements, consulting with qualified legal and tax professionals ensures compliance and optimal outcomes.
📚 Sources & References
This article has been fact-checked against official Hong Kong government sources and authoritative references:
- Inland Revenue Department (IRD) – Official tax rates, allowances, and regulations
- Rating and Valuation Department (RVD) – Property rates and valuations
- GovHK – Official Hong Kong Government portal
- Legislative Council – Tax legislation and amendments
- IRD Stamp Duty Guide – Official stamp duty rates and exemptions
- IRD Estate Duty Information – Official guidance on abolished estate duty
- Hong Kong Budget 2024-25 – Official budget documents including tax changes
Last verified: December 2024 | Information is for general guidance only. Consult a qualified tax professional for specific advice.
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