đź“‹ Key Facts at a Glance
- Unified Tax System: Since February 28, 2024, both residential and commercial properties are subject to the same AVD Scale 2 rates
- Abolished Duties: Buyer’s Stamp Duty (BSD) and Special Stamp Duty (SSD) were completely removed for residential properties on February 28, 2024
- Current Rates: AVD ranges from HK$100 (properties up to HK$3 million) to 4.25% (properties over HK$21.74 million) as of 2024-2025
- No Buyer Discrimination: Hong Kong permanent residents, non-residents, and companies all pay the same rates
- Commercial Properties: Subject to Scale 2 rates since November 26, 2020
Hong Kong’s property market has undergone a seismic shift in 2024, with the government abolishing all residential property cooling measures that had been in place for over a decade. This historic change has created a unified stamp duty system where commercial and residential properties are now taxed identically. Whether you’re a business looking to acquire office space, an investor considering retail properties, or a family buying a home, understanding these changes is crucial for making informed decisions in Hong Kong’s dynamic property landscape.
The 2024 Stamp Duty Revolution: What Changed
On February 28, 2024, the Hong Kong government announced in its 2024-25 Budget the complete abolition of all demand-side management measures for residential properties. This landmark change eliminated the complex, multi-tiered system that had governed residential property transactions since 2010.
What Was Abolished on February 28, 2024
- Buyer’s Stamp Duty (BSD): Previously charged at 7.5% on residential property purchases by non-Hong Kong permanent residents and companies
- Special Stamp Duty (SSD): Previously charged up to 20% on residential properties sold within two years of acquisition
- New Residential Stamp Duty (NRSD): Previously applicable to certain residential property transactions
- Higher AVD Rates: The additional 7.5% flat rate that applied to second or subsequent residential property purchases
Current Stamp Duty Structure: Commercial vs. Residential
As of February 28, 2024, Hong Kong applies a single Ad Valorem Stamp Duty (AVD) rate structure—Scale 2—to all property transactions. This unified system applies regardless of property type, buyer status, entity type, or number of properties already owned.
Ad Valorem Stamp Duty (AVD) Scale 2 Rates (2024-2025)
| Property Value (HK$) | Stamp Duty Rate |
|---|---|
| Up to $3,000,000 | HK$100 (flat fee) |
| $3,000,001 – 3,528,240 | HK$100 + 10% of excess |
| $3,528,241 – 4,500,000 | 1.5% |
| $4,500,001 – 4,935,480 | 1.5% to 2.25% |
| $4,935,481 – 6,000,000 | 2.25% |
| $6,000,001 – 6,642,860 | 2.25% to 3% |
| $6,642,861 – 9,000,000 | 3% |
| $9,000,001 – 10,080,000 | 3% to 3.75% |
| $10,080,001 – 20,000,000 | 3.75% |
| $20,000,001 – 21,739,120 | 3.75% to 4.25% |
| Above $21,739,120 | 4.25% |
Commercial Property Stamp Duty: Specific Considerations
What Qualifies as Non-Residential Property?
Non-residential properties in Hong Kong include a wide range of commercial assets:
- Office buildings and commercial office spaces
- Retail shops and shopping centers
- Industrial buildings and warehouses
- Car parking spaces (non-domestic)
- Hotels and serviced apartments operated as businesses
- Land zoned for commercial or industrial use
Lease Stamp Duty for Commercial Properties
In addition to purchase transactions, lease agreements for commercial properties are subject to stamp duty based on the lease term and annual rental:
| Lease Term | Stamp Duty Rate | Calculation Base |
|---|---|---|
| 1 year or less | 0.25% | Total rent for the term |
| More than 1 year but not exceeding 3 years | 0.5% | Average annual rent Ă— term |
| More than 3 years or indefinite term | 1% | Average annual rent Ă— term (or annual rent Ă— 3 for indefinite) |
Exemptions for Commercial Properties
Certain commercial property transactions may qualify for stamp duty exemptions:
- Intra-group transfers: Transfers between associated companies may be exempt subject to Inland Revenue Department approval and meeting specific conditions
- Corporate restructuring: Certain transactions related to genuine corporate reorganizations may qualify for relief
- Charitable organizations: Transfers involving approved charitable institutions may be exempt
Residential Property Stamp Duty: Post-2024 Landscape
Comparison Table: Old vs. New System for Residential Properties
| Buyer Category | Before Feb 28, 2024 | After Feb 28, 2024 |
|---|---|---|
| HK Permanent Resident (First Property) | Scale 2 AVD (up to 4.25%) | Scale 2 AVD (up to 4.25%) |
| HK Permanent Resident (Second+ Property) | 7.5% flat rate | Scale 2 AVD (up to 4.25%) |
| Non-Permanent Resident | 7.5% AVD + 7.5% BSD = 15% | Scale 2 AVD (up to 4.25%) |
| Foreign Buyer | 7.5% AVD + 7.5% BSD = 15% | Scale 2 AVD (up to 4.25%) |
| Company/Corporate Entity | 7.5% AVD + 7.5% BSD = 15% | Scale 2 AVD (up to 4.25%) |
| Resale within 6 months | Above rates + 20% SSD | Scale 2 AVD only (no SSD) |
| Resale within 6-12 months | Above rates + 15% SSD | Scale 2 AVD only (no SSD) |
| Resale within 12-24 months | Above rates + 10% SSD | Scale 2 AVD only (no SSD) |
Key Distinctions: Commercial vs. Residential Property Taxation
| Aspect | Residential Property | Commercial Property |
|---|---|---|
| AVD on Purchase | Scale 2 (since Feb 28, 2024) | Scale 2 (since Nov 26, 2020) |
| BSD (Buyer’s Stamp Duty) | Abolished (was 7.5% for non-residents) | Never applicable |
| SSD (Special Stamp Duty) | Abolished (was up to 20% within 2 years) | Never applicable |
| Lease Stamp Duty | 0.25% to 1% based on term | 0.25% to 1% based on term |
| Holding Period Restrictions | None (SSD abolished) | None (never had restrictions) |
| Buyer Eligibility Restrictions | None (all buyers treated equally) | None (always treated equally) |
Compliance and Administrative Considerations
Stamping Requirements and Deadlines
- Deadline: All property transaction documents must be stamped within 30 days of execution of the agreement
- Calculation Base: Stamp duty is calculated on the higher of the stated consideration or market value
- Payment Methods: Electronic stamping is available through the IRD’s e-Stamping service for convenience
- Penalties: Late stamping incurs penalties and interest charges, so timely compliance is essential
âś… Key Takeaways
- Hong Kong now has a unified stamp duty system where both residential and commercial properties are subject to the same AVD Scale 2 rates
- All residential property cooling measures (BSD, SSD, NRSD) were abolished on February 28, 2024
- Commercial properties have been subject to Scale 2 rates since November 26, 2020, and were never subject to BSD or SSD
- All buyers—regardless of residency status, entity type, or existing property ownership—now pay the same stamp duty rates
- Lease stamp duty rates (0.25% to 1%) apply equally to both residential and commercial property leases
- No holding period requirements or penalties for owning multiple properties under the current system
- Certain transactions, particularly intra-group transfers, may qualify for stamp duty exemptions subject to IRD approval
- All property transaction documents must be stamped within 30 days of execution to avoid penalties
Hong Kong’s 2024 stamp duty reforms have created a simpler, more transparent property tax system that treats all property types and buyers equally. This unified approach has eliminated the complexity that previously discouraged investment and has positioned Hong Kong as a more competitive global property market. Whether you’re considering commercial or residential property investment, the current system offers predictability and fairness that benefits all market participants.
đź“š 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.
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