Illustrative examples of the application and computation of AVD - Scale 1 and Scale 2

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The Stamp Duty (Amendment) Ordinance 2024 ("2024 Amendment Ordinance") was published in the Gazette on 19 April 2024. Under the 2024 Amendment Ordinance, with effect from 28 February 2024, the AVD rate under Part 1 of Scale 1 is amended to the same as those of AVD at Scale 2. The following Illustrative examples of the application and computation of AVD are only applicable to immovable properties acquired between 23 February 2013 and 27 February 2024.

Mr Chan is a Hong Kong Permanent Resident (HKPR) and does not own any residential property in Hong Kong. On 1 December 2016, acting on his own behalf, he entered into a provisional agreement for sale and purchase (PASP) to acquire a residential property at a purchase price of $6M. What is the amount of AVD payable?

Since Mr Chan did not own any other residential property in Hong Kong at the time of acquisition of the subject property, lower rates (Scale 2) will apply. The AVD payable is $180,000 ($6M x 3%).

Mr Lee is a HKPR and owns a residential property (the first property) in Hong Kong. On 1 December 2016, he, acting on his own behalf, entered into a PASP to acquire another residential property (the second property) at the purchase price of $6M. The formal agreement for sale and purchase (ASP) was signed on 30 March 2017. What is the amount of AVD payable for the acquisition of the second property?

Since Mr Lee owned another residential property in Hong Kong at the time of acquisition of the second property, the flat rate of 15% under Part 1 of Scale 1 applies. The AVD payable is $900,000 ($6M x 15%).

Same as Example 2, but the PASP for acquisition of the second property was entered into on 1 November 2016. What is the amount of AVD payable for the acquisition of the second property?

In this case, the second property is regarded as having been acquired on the date of the PASP (i.e. 1 November 2016, on or after 23 February 2013 but before 5 November 2016). Hence, the former Scale 1 rates (now rates under Part 2 of Scale 1) will apply. The AVD payable is $360,000 ($6M x 6%).

Same as Example 2, but the PASP and ASP for acquisition of the second property were entered into on 1 February 2013 and 1 March 2013 respectively. What is the amount of AVD payable for the acquisition of the second property?

In the above case, the second property will be regarded as acquired before 23 February 2013, Scale 2 will apply. The AVD payable is $180,000 ($6M x 3%).

Mr Wong, a HKPR, and his spouse Ms Cheung, jointly purchased a residential property on 1 December 2016 at a purchase price of $8M. Ms Cheung is not a HKPR. Neither Mr Wong nor Ms Cheung owns any residential property in Hong Kong. Each of Mr Wong and Ms Cheung acted on his/her own behalf in acquiring the property. What is the amount of AVD payable?

Scale 2 applies as the residential property was acquired jointly by a HKPR with his close relative (i.e. spouse, parents, children, brothers and sisters) and each of the purchasers was acting on his/her own behalf and did not own other residential property at the time of acquisition. The AVD payable is $300,000 ($8M x 3.75%).

Same as Example 5 but Ms Cheung owned another residential property in Hong Kong when she and Mr Wong acquired the residential property (the second property). What is the amount of AVD payable for the acquisition of the second property?

Since one of the purchasers, i.e. Ms Cheung, owns another residential property in Hong Kong at the time of acquisition of the second property, the flat rate of 15% (Part 1 of Scale 1) applies. The AVD payable is $1,200,000 ($8M x 15%).

Same as Example 5 but Mr Wong and Ms Cheung are not close relatives. What is the amount of stamp duty payable?

If a residential property is jointly acquired by a HKPR and a non-HKPR, who is not a close relative of the HKPR, the flat rate of 15% under Part 1 of Scale 1 will apply. In the above situation, the amount of AVD payable is $1,200,000 (i.e. 8M x 15%). Furthermore, since Ms Cheung is a non-HKPR and not a close relative of Mr Wong, Buyer’s Stamp Duty (BSD) of $1,200,000 ($8M x 15%) will also be payable.

Mr Au is a HKPR and does not own any residential property in Hong Kong. On 1 December 2016, he entered into an ASP to acquire a residential property at a purchase price of $22M. On 30 January 2017, the name of his spouse Ms Lau, who already owned a residential property in Hong Kong, was added in the assignment as one of the joint owners of the property. Each of Mr Au and Ms Lau was acting on his/her own behalf in acquiring the property. What is the amount of AVD payable?

The ASP will be charged with AVD of $935,000 ($22M x 4.25%) at Scale 2. As for the assignment, since Ms Lau already owned a residential property in Hong Kong, it will be chargeable with AVD at Scale 2, which is computed by reference to the stated consideration or the value of the property, whichever is the higher, less part of the stamp duty representing the share of the interest of Mr Au in the property. Accordingly, AVD of $467,500 [($22M x 4.25%) x 50%] will be charged on the assignment.

Same as Example 8, but Ms Lau does not own any other residential property in Hong Kong. What is the amount of AVD payable?

The agreement will be charged with AVD of $935,000 ($22M x 4.25%) as aforesaid. As for the assignment, since Mr Au and Ms Lau are close relatives and Ms Lau does not own any other residential property, it will not attract any AVD; it will be charged with a fixed duty of $100 only.

10.

Will the Answers for Examples 8 and 9 be different if the residential property was acquired by Mr Au before 5 November 2016?

The Answers will be the same.

11.

Mr Liu is a HKPR. On 1 December 2016, he entered into a PASP to acquire a residential property at a purchase price of $10M. At the time of acquisition, he did not own any other residential property in Hong Kong. He nominated his spouse Ms Kok, who already owned a residential property in Hong Kong, to enter into the ASP as the sole purchaser. Each of Mr Liu and Ms Kok was acting on his/her own behalf in acquiring the property. What is the amount of AVD payable?

The PASP will be charged with AVD of $375,000 ($10M x 3.75%) at Scale 2. As for the ASP, since Ms Kok already owned a residential property in Hong Kong, AVD of $375,000, at Scale 2, will be payable on the ASP.

12.

Same as Example 11, but Ms Kok does not own any other residential property in Hong Kong. What is the amount of AVD payable?

The PASP will be charged with AVD of $375,000 ($10M x 3.75%) as aforesaid. As for the ASP, since Mr Liu and Ms Kok are close relatives and Ms Kok does not own any other residential property, it will not attract any AVD; the ASP will be charged with a fixed duty of $100 only.

13.

Mr Chiu is a HKPR. On 1 December 2017, he entered into an ASP to acquire a residential property at a purchase price of $22M. At the time of acquisition, he owned another residential property in Hong Kong. By an assignment dated 1 January 2018 (the First Assignment), the property was assigned to him. By another assignment dated 1 February 2018 (the Second Assignment), he assigned the property to himself and his spouse Ms Mak in joint names. At that time, Ms Mak already owned another residential property. Each of Mr Chiu and Ms Mak was acting on his/her own behalf in acquiring the property. What is the amount of AVD payable?

The ASP will be charged with AVD of $3,300,000 ($22M x 15%) at the rate under Part 1 of Scale 1. The First Assignment will be charged with a fixed duty of $100. The assignment of the property (the Second Assignment) to Mr Chiu and Ms Mak in joint names will have the effect of disposing of half of the interest in the property. Assuming that there is no change in the value of the property, since Mr Chiu and Ms Mak are close relatives, Scale 2 will apply. In such a case, AVD of $412,500 [($22M x 50%) x 3.75%] will be charged on the Second Assignment.

14.

Mr Tang and Ms Fong, both are HKPRs, entered into a PASP on 1 November 2017 to acquire a residential property at a purchase price of $15M from a vendor who has held the property for more than 3 years. On 30 January 2018, the name of Ms Ho, a non-HKPR, was added in the ASP as one of the purchasers. Ms Ho is not a close relative of Mr Tang or of Ms Fong. All three persons at the time of acquisition did not own any other residential property in Hong Kong. Each of Mr Tang, Ms Fong and Ms Ho was acting on his/her own behalf in acquiring the property. What is the amount of stamp duty payable?

By adding the name of Ms Ho in the ASP, Mr Tang and Ms Fong have disposed of part of the residential property within 6 months from the date of acquisition and Ms Ho has acquired that part of the property from Mr Tang and Ms Fong. As Ms Ho is not a close relative of both Mr Tang and Ms Fong, AVD charged at 15% under Part 1 of Scale 1, Special Stamp Duty (SSD) and BSD will be payable, which are computed as follows:

Document	Nature of stamp duty	Amount ($)
PASP	AVD (charged at Scale 2)	$562,500 ($15M x 3.75%)
ASP	AVD (charged at the rate under Part 1 of Scale 1)	$750,000 [($15M x 15%) x 1/3]
ASP	SSD	$1,000,000 ($15M x 1/3 x 20%)
ASP	BSD	$2,250,000 ($15M x 15%)

15.

Mr Wan is a HKPR. On 1 December 2016, acting on his own behalf, he entered into a PASP to acquire a residential property (the new property) at a purchase price of $8M. At that time, he already owned another residential property in Hong Kong (the original property). On 1 January 2017, the new property was assigned to him. On 15 August 2017, he entered into a PASP to dispose of the original property. Can Mr Wan claim for a partial refund of the AVD paid for the new property?

Since Mr Wan owned the original residential property in Hong Kong at the time of acquisition of the new property, Part 1 of Scale 1 will apply. The AVD payable for acquisition of the new property is $1,200,000 ($8M x 15%). Mr Wan can apply for a refund of part of the stamp duty paid since the new property was acquired by him on or after 5 November 2016 and the original property was sold within 12 months after the date the new property was assigned to him. The application can be made upon the completion of the disposal of the original property. In the above situation, the amount of partial refund is $900,000 ($1,200,000 – $8M x 3.75%). The application for a partial refund must be made not later than 2 years after the date of execution of the PASP for acquiring the new property (i.e. from 1 December 2016), or not later than 2 months after the date of the conveyance on sale for the disposal of the original property, whichever is the later.

16.

Same as Example 15, but the PASP for acquisition of the new property was entered into before 5 November 2016. Can Mr Wan claim for a partial refund of the AVD paid?

In the above situation, since the new property was acquired by Mr Wan before 5 November 2016 and the original property was sold more than 6 months from the date the new property was assigned to him, no stamp duty is refundable.

17.

Same as Example 15, but the PASP for disposal of the original property was entered into on 1 February 2018. Can Mr Wan claim for a partial refund of the AVD paid?

In the above situation, no stamp duty will be refundable as the original property was sold more than 12 months from the date the new property was assigned to him.

18.

Same as Example 15, but on 1 December 2016, Mr Wan owned more than one residential property in Hong Kong. Can Mr Wan claim for a partial refund of the AVD paid?

In the above situation, no stamp duty will be refundable as Mr Wan owned more than one residential property in Hong Kong at the time of acquisition of the new property. The partial refund of AVD for "change of residential property" does not apply.

19.

A HKPR, who was acting on his own behalf, entered into an ASP to acquire a residential property and 2 car parking spaces on 1 December 2016. At the time of acquisition, he did not own any residential property and car parking space in Hong Kong. How is AVD chargeable?

The acquisition of the residential property is chargeable with AVD at Scale 2. For the acquisition of the car parking spaces, Part 2 of Scale 1 will apply. The applicable stamp duty rates will be determined by reference to the total consideration of the residential property and the car parking spaces.

20.

Same as Example 19, but the ASP to acquire the residential property and the two car parking spaces was entered into on 26 November 2020. How is AVD chargeable?

The ASP will be charged with AVD at Scale 2 by reference to the total consideration of the residential property and the two car parking spaces.

21.

Mr Yip is a HKPR. On 12 April 2017, when he did not own any residential property in Hong Kong, Mr Yip entered into a provisional agreement for sale and purchase (“PASP”) to acquire 2 residential properties at the purchase price of $20M from a vendor who is not a close relative of Mr Yip. What is the amount of AVD payable for the acquisition of the 2 properties?

Since Mr Yip acquires more than 1 residential property under one instrument, although he does not own any residential property in Hong Kong on the date of acquisition of the residential properties, AVD at Part 1 of Scale 1 rate will apply. The AVD payable is $3,000,000 ($20M x 15%).

22.

Same as Example 21, but the 2 residential properties are 2 adjacent residential properties. At the time of entering into the PASP, the partition wall dividing the 2 units had been demolished by the vendor and the two units were combined as one unit. The plan for alterations works had been approved by the Building Authority. What is the amount of AVD payable?

If Mr Yip is acting on his own behalf in acquiring the properties, AVD at Scale 2 rates will apply. The AVD payable is $750,000 ($20M x 3.75%).

23.

Same as Example 22, but no approval has been given by the Building Authority. Nor is there any building plan signed by an authorized person for the alterations works. What is the amount of AVD payable?

If there is no evidence to prove that the alterations works have been approved by the Building Authority or certified by an authorized person, the properties will be regarded as two separate units. AVD at Part 1 of Scale 1 rate will apply. The amount of AVD payable is $3,000,000 (i.e. $20M x 15%).

24.

Same as Example 21, but Mr Yip and the vendor are closely related persons. What is the amount of AVD payable?

If Mr Yip is acting on his own behalf in acquiring the properties, AVD at Scale 2 rates will apply. The agreement will be charged with AVD of $750,000 ($20M x 3.75%).

25.

Mr Chan is a Hong Kong permanent resident (HKPR) and does not own any residential property in Hong Kong. If he enters into a provisional agreement for sale and purchase (PASP) on 23 February 2023 to acquire a residential property, how much AVD will be saved by him at different purchase price of the subject property?

Since Mr Chan does not own any other residential property in Hong Kong at the time of acquisition of the subject property, Scale 2 rates will apply. Compared with the AVD payable under the former Scale 2 rates, the AVD saved by him at different purchase prices of the property is appended below.

Purchase price of the property	AVD payable under Scale 2 rates applicable to instruments executed before 11 am on 22.2.2023	AVD payable under Scale 2 rates applicable to instruments executed at 11 am on 22.2.2023 or thereafter	AVD Saved
$5,000,000	$150,000	$112,500	$37,500
$6,500,000	$230,000	$185,000	$45,000
$9,000,000	$337,500	$270,000	$67,500
$10,000,000	$375,000	$370,000	$5,000

26.

Mr Chan is a Hong Kong permanent resident (HKPR) and does not own any residential property in Hong Kong. On 20 February 2023, he entered into a PASP to acquire a residential property at a purchase price of $9M. He will sign a formal agreement for sale and purchase on the same terms with the PASP on 6 March 2023. What is the amount of the AVD payable?

In this case, the subject property is regarded as having been acquired on the date of the PASP (i.e. 20 February 2023, before 11 am on 22 February 2023). Hence, the former Scale 2 rates will apply. The AVD payable is $337,500 ($9,000,000 × 3.75%).

27.

Mr. Lee is a HKPR and owns a residential property in Hong Kong. On 24 October 2023, he entered into a PASP to acquire another residential property at a purchase price of $10M. He will sign a formal agreement for sale and purchase on the same terms with the PASP on 6 November 2023. What is the amount of the AVD payable?

In this case, the subject property is regarded as having been acquired on the date of the PASP (i.e. 24 October 2023, before 25 October 2023). Hence, the former Part 1 of Scale 1 rate will apply. The AVD payable is $1.5M ($10M × 15%).