Hong Kong’s Green Building Landscape in 2025

Hong Kong has made significant strides in promoting sustainable construction as part of its Climate Action Plan 2050, which aims to achieve carbon neutrality before 2050. With buildings accounting for approximately 90% of Hong Kong’s total electricity consumption and over 50% of carbon emissions attributable to generating electricity for buildings, the government has implemented a multi-pronged strategy to encourage green building development.

As of March 2024, more than 2,500 projects have been registered or certified with BEAM Plus (Building Environmental Assessment Method Plus) in Hong Kong, reflecting growing adoption of sustainable building practices. The certification program, established in 2009 as a successor to the original BEAM scheme from 1996, has become the territory’s leading environmental assessment tool for buildings.

Understanding Hong Kong’s Current Stamp Duty Structure

Ad Valorem Stamp Duty (AVD) Rates – 2025 Update

Following the 2025-26 Budget announcement, significant changes to stamp duty came into effect on February 26, 2025. The maximum value of properties chargeable to HKD 100 stamp duty was raised from HKD 3 million to HKD 4 million, easing the burden for buyers of lower-value residential and non-residential properties.

As of February 28, 2024, Hong Kong eliminated the distinction between residential and non-residential properties for AVD purposes. All buyers—whether Hong Kong permanent residents, non-residents, or companies—now follow the same Scale 2 rates.

Other Property-Related Stamp Duties

• Buyer’s Stamp Duty (BSD): 7.5% for non-Hong Kong permanent resident buyers
• Special Stamp Duty (SSD): Applicable to those who dispose of residential property within 2 years after acquisition (aimed at discouraging speculation)
• Lease Stamp Duty: Ranges from 0.25% (lease period not exceeding one year) to 1% (lease period exceeding three years) of annual rental

Green Building Incentives: The Current Reality

No Direct Stamp Duty Concessions for Green Buildings

A critical point for property investors and developers to understand: Hong Kong does not currently offer stamp duty concessions or reductions specifically for green or BEAM Plus certified buildings. The government’s incentive mechanism operates through a different channel—Gross Floor Area (GFA) concessions.

BEAM Plus Certification Overview

BEAM Plus is a voluntary private sector initiative administered by the BEAM Society and recognized by the Hong Kong Green Building Council (HKGBC). The certification program offers separate assessment tools for:

• New Buildings (NB)
• Existing Buildings (EB)
• Interiors (BI)
• Neighborhood (ND)
• Data Centers (DC)
• Existing Schools (ES)

Four rating levels are available: Platinum, Gold, Silver, and Bronze. In 2025, updated versions were released, including BEAM Plus New Buildings V2.0 (February 2025) and BEAM Plus EB Version 3.0 (July 2025).

Actual Incentives Available for Green Buildings

1. Gross Floor Area (GFA) Concessions

The primary government incentive for green buildings operates through GFA concessions. Under the Buildings Department’s Practice Note PNAP APP-151 (revised September 2023 and updated June 2024):

2. Profits Tax Benefits

Effective January 1, 2018, buildings achieving BEAM Plus certification qualify for tax benefits through the Energy Efficiency Registration Scheme for Buildings (HKEERSB):

• Eligibility: Buildings with Final Bronze rating or above under BEAM Plus NB, EB, or BI
• Benefit: Accelerated deduction under profits tax for capital expenditure on energy-efficient building installations registered under HKEERSB
• Administering Authority: Electrical and Mechanical Services Department (EMSD)

3. Funding Assistance Programs

Several utility companies and government departments offer financial support for green building initiatives:

4. Market Premium Benefits

Beyond government incentives, BEAM Plus certification offers tangible market advantages:

• Property Value Premium: Studies indicate tenants in Hong Kong are willing to pay up to 9% premium for BEAM Plus certified offices
• Enhanced Marketability: Certification demonstrates commitment to environmental performance and indoor environment quality
• Reduced Operating Costs: Energy-efficient features translate to lower utility expenses

Government Sustainability Initiatives and Future Outlook

Hong Kong’s Climate Action Plan 2050

Announced in October 2021, the Climate Action Plan 2050 outlines four major decarbonization strategies:

1. Net-zero electricity generation
2. Energy saving and green buildings
3. Green transport
4. Waste reduction

Key Targets:

• Halve total carbon emissions by 2035 (from 2005 baseline)
• Achieve carbon neutrality before 2050
• Cut 40% of energy consumption by 2025 (from 2005 levels, per the Energy Saving Plan for Hong Kong’s Built Environment 2015-2025+)

Government Building Standards

The government leads by example with its own building standards:

• Since 2009: All new government buildings with construction floor area exceeding 10,000 square meters aim for at least BEAM Plus Gold rating
• Since October 2015: Target expanded to buildings exceeding 5,000 square meters with central air-conditioning
• 2023: Launch of Zero-Carbon-Ready Building Certification Scheme by HKGBC to benchmark energy performance

Recent Legislative and Policy Developments

• Buildings Energy Efficiency (Amendment) Bill 2025: Passed third reading in Legislative Council in 2025
• Sustainable Building Design Guidelines (SBDG): Introduced since April 2011, requiring incorporation of design elements including building separation, setback, and greenery
• BIM Roadmap: Government developing mandatory Building Information Modeling (BIM) requirements for new project approvals

Potential for Future Stamp Duty Incentives

The Case for Green Building Stamp Duty Concessions

While Hong Kong currently lacks direct stamp duty concessions for green buildings, several factors suggest this could change:

• Precedent in Other Jurisdictions: Several countries offer tax incentives specifically for sustainable buildings
• Climate Commitments: The 2050 carbon neutrality target may necessitate stronger financial incentives
• Green Finance Expansion: Government extended its green bond and sustainable debt instrument subsidy scheme to 2027, expanding coverage to transition bonds and loans
• Recent Budget Flexibility: The 2024-25 budget demonstrated willingness to adjust property-related taxes (abolishing SSD, BSD, and NRSD for residential properties in February 2024)

Challenges to Implementation

However, several obstacles may prevent stamp duty concessions for green buildings:

• Revenue Considerations: Stamp duty represents a significant government revenue source
• Existing Incentive Framework: GFA concessions already provide substantial value to developers
• Verification Complexity: Ensuring authentic green credentials requires robust monitoring mechanisms
• Market Distortion Risks: Additional incentives could create unintended market effects

Key Considerations for Property Investors and Developers

When Evaluating Green Building Investments

• Focus on GFA Concessions: The 10% GFA concession represents the primary government incentive—calculate potential additional saleable area carefully
• Assess BEAM Plus Gold Feasibility: Since June 30, 2024, Gold rating or above is generally required for GFA concessions
• Factor in Profits Tax Benefits: If holding properties for rental income, accelerated deductions for energy-efficient installations can provide tax advantages
• Consider Market Premium: The up to 9% premium for certified offices may justify certification costs in commercial projects
• Explore Funding Programs: Apply for utility company subsidies to offset green improvement costs
• Monitor Policy Developments: Stay informed about potential future stamp duty or tax incentives for sustainable buildings

Compliance Requirements

To qualify for green building benefits:

1. BEAM Plus Registration: Register project with HKGBC during planning phase
2. Sustainable Design Elements: Incorporate required building separation, setback, and greenery features
3. Target Rating Achievement: Aim for at least Gold rating for GFA concessions (from June 30, 2024)
4. HKEERSB Registration: Register qualifying installations with EMSD for profits tax benefits
5. Documentation: Maintain comprehensive records of energy-efficient improvements and certification evidence

Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Stamp duty rates, green building policies, and certification requirements are subject to change. Consult with qualified tax professionals and legal advisors regarding specific transactions and circumstances. Information is current as of December 2025.