Remember when Hong Kong’s property market faced its biggest challenge in decades? The COVID-19 pandemic didn’t just disrupt daily life—it triggered a massive government response that reshaped property taxation and relief measures for four years. From unprecedented rates concessions to the complete removal of stamp duties, Hong Kong’s property landscape has undergone a dramatic transformation. Let’s explore what changed, what’s back to normal, and what permanent shifts emerged from this extraordinary period.

The Pre-Pandemic Baseline: Hong Kong’s Property Market in 2019

Before COVID-19, Hong Kong’s property market was the world’s most expensive, with median property prices exceeding 20 times annual household income. The government collected substantial revenue from property-related taxes, including multiple cooling measures designed to curb speculation. The fundamental property rates structure was simple: 5% of rateable value for property rates, plus 3% for government rent on applicable properties.

Unprecedented Relief: The COVID-19 Response (2020-2023)

When COVID-19 struck in early 2020, the Hong Kong SAR Government launched one of the world’s most comprehensive relief packages. Property rates concessions became a cornerstone of economic support, providing direct financial relief to both residential and commercial property owners.

Peak Pandemic Relief: 2020-21 Fiscal Year

The government recognized that businesses faced existential threats, so non-domestic properties received significantly higher concessions:

Sustained Support: 2021-22 and 2022-23 Fiscal Years

As the pandemic continued with recurring waves, the government maintained but gradually reduced relief:

Return to Normalcy: 2024-25 and Beyond

With Hong Kong’s borders reopened and economic activity resuming, the government began phasing out extraordinary relief measures. The 2024-25 Budget signaled a clear return to normal fiscal arrangements:

• Q1 2024-25 (April-June 2024): Concession of HK$1,000 for all properties
• Q2-Q4 2024-25: No concessions – full rates payable
• Q1 2025-26 (April-June 2025): Planned concession of only HK$500
• Q2-Q4 2025-26: Expected to be concession-free

The HK$300 Billion Anti-Epidemic Fund: Comprehensive Relief

Property rates concessions were just one component of Hong Kong’s massive HK$300 billion relief package (approximately 10% of GDP). The Anti-epidemic Fund provided multi-faceted support:

Game-Changer: Stamp Duty Abolition (February 28, 2024)

In a landmark policy shift, the Hong Kong Government abolished all demand-side property cooling measures effective February 28, 2024. This was arguably the most significant property market development of the post-pandemic period.

What Was Abolished?

• Buyer’s Stamp Duty (BSD): The additional 15% duty on purchases by non-Hong Kong permanent residents – ABOLISHED
• Special Stamp Duty (SSD): The anti-speculation duty on short-term resales – ABOLISHED
• New Residential Stamp Duty (NRSD): The 15% flat rate applicable to most residential transactions – ABOLISHED

Market Impact: Immediate Recovery

The stamp duty removal catalyzed a dramatic market recovery:

• Transaction Volume Surge: Residential transactions increased by over 50% in the three months following abolition
• Foreign Investment Return: Mainland Chinese and overseas investors returned, previously deterred by the 15% BSD
• Secondary Market Revival: Short-term resales became viable again without SSD penalties
• Current Status (2024-25): Transaction volumes have returned to 80-90% of pre-pandemic (2019) levels

Permanent Change: Rental Expense Tax Deduction

One pandemic-era measure that continues and represents a structural change to Hong Kong’s tax system is the rental expense deduction for domestic tenants.

Real-World Example: Tax Savings Calculation

Let’s see how this deduction works for a typical renter in 2024-25:

What Didn’t Change: The Fundamental Rate Structure

Despite all the temporary measures and policy shifts, Hong Kong’s core property rating system remains unchanged:

The Rating and Valuation Department continues to assess rateable values based on estimated annual rental values, and properties are still assessed individually based on location, size, age, and facilities. The temporary concessions only reduced the amounts payable, not the underlying rate structure.

Hong Kong’s property tax landscape has completed its journey from unprecedented pandemic relief back to normal fiscal arrangements. While temporary concessions are nearly gone, permanent changes like the rental expense deduction and stamp duty abolition have reshaped the market. Property owners should now prepare for full rates liability, while renters can continue benefiting from tax deductions. The market’s strong recovery demonstrates Hong Kong’s resilience and the effectiveness of targeted policy interventions during crisis periods.