Hong Kong’s Double Stamp Duty: When Does It Apply and How to Plan Ahead
📋 Key Facts at a Glance
- Major Policy Change: All demand-side management measures (BSD, SSD, and higher AVD rates) were eliminated effective 28 February 2024
- Current System: Only Ad Valorem Stamp Duty (AVD) applies to all property transactions at Scale 2 rates
- Universal Application: No distinction between Hong Kong permanent residents and non-residents, or between residential and non-residential properties
- Rate Range: HK$100 (properties up to HK$3 million) to 4.25% (properties over HK$21.74 million)
- Payment Deadline: Stamp duty must be paid within 30 days of document execution to avoid penalties
Hong Kong’s property market has undergone a dramatic transformation in 2024. Gone are the days of complex “double stamp duty” calculations and restrictive holding periods. With the abolition of all demand-side cooling measures, Hong Kong now offers one of the most straightforward property tax regimes in Asia. Whether you’re a local resident, foreign investor, or corporate buyer, understanding the current simplified system is essential for making informed property decisions in today’s market.
The 2024 Stamp Duty Revolution: What Changed
In a landmark move on 28 February 2024, the Hong Kong SAR Government announced the immediate cancellation of all demand-side management measures for residential properties. This represented one of the most significant property tax reforms in Hong Kong’s recent history, completely transforming the landscape for property buyers and investors.
What Was Abolished on 28 February 2024
- Buyer’s Stamp Duty (BSD): The additional 15% (later 7.5%) charged on non-Hong Kong permanent residents and certain corporate buyers purchasing residential properties was completely eliminated.
- Special Stamp Duty (SSD): The mandatory holding period requirement was removed. Property owners can now resell residential properties at any time without incurring SSD penalties of up to 20%.
- AVD Scale 1 Eliminated: The higher AVD rate of 15% (or 7.5%) under Part 1 of Scale 1 was removed and replaced with the lower Scale 2 progressive rates.
Current Stamp Duty Rates: AVD Scale 2 (2024-2025)
As of 28 February 2024, Hong Kong property transactions are subject only to Ad Valorem Stamp Duty (AVD) at Scale 2 rates. The system is now remarkably simple and applies uniformly to all buyers and property types.
Complete AVD Scale 2 Rate Table
| Property Value or Consideration | Stamp Duty Rate |
|---|---|
| Up to HK$3,000,000 | HK$100 |
| HK$3,000,001 – 3,528,240 | HK$100 + 10% of excess over HK$3,000,000 |
| HK$3,528,241 – 4,500,000 | 1.5% |
| HK$4,500,001 – 4,935,480 | 1.5% to 2.25% (progressive) |
| HK$4,935,481 – 6,000,000 | 2.25% |
| HK$6,000,001 – 6,642,860 | 2.25% to 3% (progressive) |
| HK$6,642,861 – 9,000,000 | 3% |
| HK$9,000,001 – 10,080,000 | 3% to 3.75% (progressive) |
| HK$10,080,001 – 20,000,000 | 3.75% |
| HK$20,000,001 – 21,739,120 | 3.75% to 4.25% (progressive) |
| Above HK$21,739,120 | 4.25% |
Note: Stamp duty is calculated on the property value or stated consideration, whichever is higher.
Practical Examples: Stamp Duty Calculations
| Property Value | AVD Rate | Stamp Duty Payable |
|---|---|---|
| HK$2,800,000 | Flat rate | HK$100 |
| HK$5,000,000 | 2.25% | HK$112,500 |
| HK$8,000,000 | 3% | HK$240,000 |
| HK$15,000,000 | 3.75% | HK$562,500 |
| HK$25,000,000 | 4.25% | HK$1,062,500 |
When Does Stamp Duty Apply?
Triggering Events
Ad Valorem Stamp Duty becomes payable when a property transaction is executed. Specifically, stamp duty applies to:
- Agreements for Sale: When a provisional or formal agreement for the sale and purchase of property is signed
- Conveyances on Sale: When the actual property transfer document is executed
- Assignments: When property rights are assigned from one party to another
- Exchanges: When properties are exchanged between parties
Payment Timeline and Penalties
Stamp duty must be paid within 30 days of the execution of the relevant document. Failure to pay within this period results in penalty tax:
- Up to 2 times the stamp duty payable if stamped within 1 month after the 30-day period
- Up to 4 times the stamp duty payable if stamped more than 1 month after the 30-day period
Strategic Planning for Property Buyers
1. Timing Your Purchase
The elimination of SSD has removed the mandatory holding period, providing greater flexibility for property investment strategies. Buyers can now:
- Purchase and resell properties without penalty, regardless of holding period
- Take advantage of short-term market opportunities
- Restructure property portfolios more freely
2. Foreign and Non-Permanent Resident Buyers
The removal of BSD has made Hong Kong’s property market significantly more attractive to foreign investors and non-permanent residents:
- No additional 15% or 7.5% BSD surcharge
- Same AVD rates as Hong Kong permanent residents
- Greater ease in diversifying international property portfolios
3. Utilizing the HK$100 Threshold
For buyers of lower-value properties (up to HK$3 million), the flat HK$100 stamp duty represents significant savings:
- Smaller residential units in outlying areas
- Car parking spaces
- Industrial or commercial properties in lower-value segments
Common Misconceptions Debunked
| Misconception | Reality |
|---|---|
| “Double stamp duty still exists” | The “double stamp duty” system was completely abolished on 28 February 2024. Only AVD at Scale 2 rates applies. |
| “First-time buyers get preferential rates” | All buyers—whether first-time purchasers or existing property owners—pay the same AVD Scale 2 rates. |
| “I must hold property for 24 months” | SSD was abolished. Properties can be resold immediately without any holding period penalties. |
| “Non-residents pay higher stamp duty” | BSD targeting non-Hong Kong permanent residents was eliminated. All buyers pay identical AVD rates. |
| “Commercial properties have different rates” | Residential and non-residential properties are subject to the same AVD Scale 2 rates. |
Exemptions and Special Cases
While the current system has been greatly simplified, certain exemptions and special provisions still exist:
Family Transfers
- Transfers between spouses: May be exempt from stamp duty if certain conditions are met
- Transfers to beneficiaries under a will: Generally exempt from AVD
- Transfers pursuant to a court order: Such as divorce settlements, may be exempt
Nominations
When a property buyer nominates another person to become the property purchaser (nominee):
- If the nomination occurs before the agreement for sale is executed, only one set of stamp duty is payable (by the nominee)
- If the nomination occurs after execution, additional stamp duty may be payable
- Nominations to close relatives (spouse, parents, children, siblings) may qualify for relief in certain situations
✅ Key Takeaways
- Hong Kong’s stamp duty framework was dramatically simplified on 28 February 2024, eliminating BSD, SSD, and higher AVD rates
- All property buyers now pay only AVD at Scale 2 rates, regardless of residency status, property type, or number of properties owned
- AVD ranges from HK$100 for properties up to HK$3 million to 4.25% for properties exceeding HK$21.74 million
- The abolition of SSD means properties can be resold at any time without penalty
- The removal of BSD has made Hong Kong’s property market more accessible to non-residents and foreign investors
- Stamp duty must be paid within 30 days of document execution to avoid penalties of up to 4 times the duty amount
- Family transfers and certain nominations may qualify for exemptions or relief
- Complex transactions, high-value properties, and non-standard situations warrant professional tax and legal advice
Hong Kong’s property stamp duty regime has undergone a remarkable transformation in 2024, moving from one of Asia’s most complex systems to one of its simplest. The elimination of all demand-side cooling measures has created new opportunities for both local and international investors. However, while the system is now straightforward, proper planning and professional advice remain essential for significant transactions. Always verify current rates with official sources and consult qualified professionals for your specific circumstances.
📚 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 regulations
- GovHK Stamp Duty Rates – Current stamp duty rate tables
- IRD AVD FAQ – Frequently asked questions about Ad Valorem Stamp Duty
Last verified: December 2024 | Information is for general guidance only. Consult a qualified tax professional for specific advice.