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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, any instrument executed on or after 28 February 2024 for the sale and purchase or transfer of residential property is no longer subject to BSD. The following FAQs on BSD are only applicable to residential properties acquired between 27 October 2012 and 27 February 2024.
1.
Q:
Under what circumstances will BSD be payable?
A:
Unless specifically exempted, BSD is payable on an agreement for sale or a conveyance on sale for the acquisition of any residential property executed on or after 27 October 2012, except where the purchaser or the transferee is a Hong Kong permanent resident (HKPR) acquiring the property on his/her own behalf (i.e. the person is both the legal and beneficial owner).
2.
Q:
Who will be liable to pay the BSD?
3.
Q:
Will BSD be applicable to a non-HKPR who has entered into a Provisional Agreement for Sale and Purchase (PASP) in respect of a residential property before 27 October 2012 and signed an Agreement for Sale and Purchase (ASP) on or after that date?
A:
For BSD purposes, a PASP is a chargeable agreement for sale. The non-HKPR who entered into a PASP for purchase of a residential property before 27 October 2012 is regarded as having “acquired” the property before that date. Hence, BSD will NOT apply to the acquisition of the property.
4.
Q:
How to calculate BSD? What is the rate of BSD?
A:
BSD is charged at a flat rate on the stated consideration or the market value of the property (whichever is the higher). For a non-HKPR who entered into a PASP for purchase of a residential property on or after 27 October 2012 but before 25 October 2023, the rate is 15%. If the PASP is entered into on or after 25 October 2023, the applicable rate will be 7.5%.
5.
Q:
How to determine whether a person is a HKPR under the Stamp Duty Ordinance (Cap.117) (SDO) or not?
A:
Under the SDO, HKPR means a person who holds a valid permanent identity card (“PIC”). HKPRs also include the aged, the blind or the infirm who are not required to register or apply for an identity card under regulation 25(e) of the Registration of Persons Regulations (Cap. 177A) and are entitled to be issued with a PIC if they make an application for a PIC.
A person who only holds a Notice of Application Result for Verification of Eligibility for PIC issued by the Immigration Department cannot be regarded as a HKPR for the purposes of BSD.
6.
Q:
Is a company whose shareholders and directors are all HKPRs liable to BSD?
A:
A limited company, regardless of the residency status of its shareholders and directors, will be liable to BSD if it acquires a residential property on or after 27 October 2012.
7.
Q:
Is an agreement for sale signed by a non-HKPR to acquire a residential property and hold it as a trustee for a HKPR subject to BSD?
A:
An agreement for sale signed by any person (irrespective of whether the person is a HKPR or non-HKPR) in the capacity of a trustee on behalf of a HKPR is chargeable with BSD, unless the latter is a mentally incapacitated person. Mentally incapacitated person means a person who is mentally disordered or mentally handicapped within the meaning of the Mental Health Ordinance (Cap. 136) and is, because of his or her mental state, incapable of managing and administering his or her property and affairs.
8.
Q:
Is the instrument for transfer of a serviced apartment chargeable with BSD?
A:
For stamp duty purposes, the classification of premises in terms of “residential property” or “non-residential property” is by reference to the permitted use rather than the actual use of the properties, or the label or description given to the properties. Unless there is documentary evidence (such as Government lease, occupation permit, etc) to show that the property cannot be used for residential purposes, the instrument signed by a non-HKPR as buyer for acquisition of the property will be chargeable with BSD.
9.
Q:
Under what circumstances will BSD be exempted?
A:
BSD will be exempted under the following circumstances –
| (i) | acquisition of a residential property by a HKPR jointly with a close relative or close relatives (i.e. spouse, parents, children, brothers and sisters) who is/are not HKPR and each of the purchasers is acting on his/her own behalf. In order to satisfy the conditions of this exemption, all the purchasers or transferees must be closely related; | |
| (ii) | transfer of a residential property to a close relative who is not a HKPR, or to a close relative(s) jointly one or more of whom is/are not HKPR and each of the transferees is acting on his/her own behalf. When there is more than one purchaser or transferee in a chargeable instrument, the purchasers or the transferees must also be closely related; | |
| (iii) | nomination of a close relative(s) who is/are not HKPR, of the original purchaser(s) to take up the assignment of a residential property and each of the nominees is acting on his/her own behalf, if there is more than one nominee, the nominees must also be close relatives; | |
| (iv) | addition/deletion of name(s) of a person(s), who is/are not HKPR, to/from a chargeable agreement for sale or a conveyance on sale in respect of a residential property if the person(s) is/are a close relative(s) of the original purchaser(s) and each of the persons is acting on his/her own behalf; | |
| (v) | acquisition or transfer of a residential property by a court order or pursuant to a court order, which includes a foreclosure order obtained by a mortgagee whether or not it falls under the definition of a financial institution within the meaning of section 2 of the Inland Revenue Ordinance. For this purpose, "court" means any court of the Hong Kong Special Administrative Region of competent jurisdiction; | |
| (vi) | transfer/vesting of a mortgaged residential property under a conveyance to/in its mortgagee that is a financial institution within the meaning of section 2 of the Inland Revenue Ordinance (Cap.112), or a receiver appointed by the mortgagee; | |
| (vii) | acquisition or transfer of a residential property by or to a body corporate from an associated body corporate; | |
| (viii) | acquisition of a residential property by a person acting on his/her own behalf to replace another residential property that was owned by that person and that has been | |
| - | purchased or acquired pursuant to redevelopment projects pursued by the Urban Renewal Authority; or | |
| - | resumed under an order made under section 3 of the Lands Resumption Ordinance (Cap. 124) or purchased under section 4A of that Ordinance; or | |
| - | sold pursuant to an order for sale made by the Lands Tribunal under the Land (Compulsory Sale for Redevelopment) Ordinance (Cap.545); or | |
| - | resumed under an order made under section 4(1) of the Mass Transit Railway (Land Resumption and Related provisions) Ordinance (Cap. 276); or | |
| - | resumed under an order made under section 13(1) of the Roads (Works, Use and Compensation) Ordinance (Cap. 370); or | |
| - | resumed under an order made under section 16 or 28(1) of the Railways Ordinance (Cap. 519); or | |
| - | acquired under an acquisition order made under section 3(1) or (2) of the Land Acquisition (Possessory Title) Ordinance (Cap. 130); or | |
| - | resumed under an order made under section 37(2) of the Land Drainage Ordinance (Cap. 446). | |
| (ix) | acquisition or transfer of residential properties by or to the Government; and | |
| (x) | gift of residential properties to charitable institutions exempted from tax under section 88 of the Inland Revenue Ordinance. | |
10.
Q:
If a residential property is acquired jointly by a HKPR and his/her spouse who is not a HKPR, will any BSD be payable?
A:
Acquisition of residential properties by a HKPR jointly with a close relative (i.e. spouse, parent, child, brother and sister) who is not a HKPR and each of them is acting on his/her own behalf is not chargeable with BSD.
11.
Q:
For stamp duty purposes, will a parent-in-law be regarded as a close relative?
12.
Q:
If a residential property is acquired by a HKPR and a non-HKPR who is not the HKPR's close relative, will only half of the price or the value of the property be chargeable with BSD?
A:
If a residential property is jointly acquired by a HKPR and a non-HKPR, who are not close relatives, whether as joint tenants or tenants-in-common, the BSD will be payable on the stated consideration or value of the property, whichever is the higher, regardless of the share of interest of the non-HKPR in the acquisition of the property.
13.
Q:
Mr. A, a HKPR, signed a PASP to purchase a residential property on 15 October 2012. Ms. B (Ms. B is not a HKPR and not a close relative of Mr. A) was added as one of the purchasers to the ASP which was signed on or after 27 October 2012. Will Mr. A and Ms. B be liable to BSD?
A:
In the above situation, Ms. B has acquired part of the property from Mr. A on or after 27 October 2012. As Ms. B is not a close relative of Mr. A, there will be no exemption of BSD. BSD is payable on the stated consideration or value of the property, whichever is the higher, regardless of the share of interest of Ms. B in the acquisition of the property.
14.
Q:
Mr. A, a HKPR, signed an ASP to purchase a residential property on 15 October 2012. Ms. B (Ms. B is not a HKPR and not a close relative of Mr. A) was added as one of the transferees to the assignment which was executed on or after 27 October 2012. Will Mr. A and Ms. B be liable to BSD?
A:
In the above situation, Ms. B has acquired part of the property from Mr. A on or after 27 October 2012. As Ms. B is not a close relative of Mr. A, there will be no exemption of BSD. BSD is payable on the stated consideration or value of the property, whichever is the higher, regardless of the share of interest of Ms. B in the acquisition of the property.
15.
Q:
Mr. A signed a PASP to purchase a residential property on 15 October 2012. Subsequently on or after 27 October 2012, he nominated Mr. B (Mr. B is not a HKPR and not a close relative of Mr. A) to take up the ASP. Will Mr. B be liable to BSD?
A:
In the above situation, Mr. B has acquired the property from Mr. A on or after 27 October 2012. As Mr. B is not a close relative of Mr. A, there will be no exemption of BSD. BSD is payable on the stated consideration or value of the property, whichever is the higher.
16.
Q:
If a non-HKPR inherits a residential property from a deceased person's estate on or after 27 October 2012, will he/she be liable to BSD?
A:
The non-HKPR is not liable to BSD as the residential property which is inherited from a deceased person's estate under a will or the law of intestacy or right of survivorship by a beneficiary is exempted from stamp duty. "Stamp duty" is defined under the Stamp Duty Ordinance (Cap.117) to include ad valorem stamp duty, special stamp duty and BSD.
17.
Q:
Are Government Grants/Leases chargeable with BSD?
A:
All grants by the Government (including those by way of Government land sales) and all Government leases are not chargeable with stamp duty (including BSD).
18.
Q:
Will any relief be given to a person who is not a HKPR but acquiring residential property for redevelopment?
A:
Relief is given by way of refund of the BSD paid. A person can apply to the Collector of Stamp Revenue for a refund of the BSD paid after the person, or if the person is a body corporate, jointly with its associated body corporate, has become the owner of the entire lot to be redeveloped and -
| (a) | Either has obtained consent to commence any foundation works for the lot (whether or not together with any other lot) from the Building Authority under the Buildings Ordinance (Cap. 123). | |
| (b) | Or has | |
| (i) | demolished or caused to demolish all buildings (if any) existing on the lot, other than a building the demolition of which is prohibited under any Ordinance; and | |
| (ii) | obtained approval of plans in respect of building works to be carried out on the lot (whether or not together with any other lot) from the Building Authority under the Buildings Ordinance (Cap. 123). | |
|
If the residential property was subsequently transferred by a body corporate to an associated body corporate, the latter may also, under the aforesaid conditions, apply for a refund of the BSD paid by the former. |
||
19.
Q:
Where residential properties in a lot were firstly acquired by several companies and then transferred to a company for redevelopment, will the BSD paid be refunded?
A:
If the transferor companies are unrelated to the transferee, the BSD paid by the former cannot be refunded. Separately, on acquisition of the residential properties from the transferors, the transferee has to pay the BSD. The transferee may claim for a refund of the BSD it paid if the conditions mentioned in A18 above were met.
If the transferor companies are associated bodies corporate of the transferee as defined under section 45 of the Stamp Duty Ordinance (Cap.117), the transferee may claim for a refund of the BSD paid by the transferor companies if the conditions mentioned in A18 above were met.
20.
Q:
Where residential properties in a lot are acquired by several companies for joint development, will the BSD paid be refunded?
A:
The companies, being the joint owners of the lot, may respectively claim for a refund of the BSD they separately paid at the times they acquired the various residential properties if they have obtained the consent to commence any foundation works for the lot; or have demolished or caused to demolish all buildings (if any) existing on the lot if not prohibited by law and obtained the approved building plan for the redevelopment after they became the joint owners of the whole lot.
21.
Q:
Will BSD be payable on an instrument of exchange under which a residential property is exchanged for another residential property?
A:
If under the instrument, a non-HKPR uses his/her residential property to exchange for another residential property and has to pay a sum of money (i.e. equality money) which represents the difference in value of the two properties, BSD which is computed by reference to the equality money will be charged on the instrument and the non-HKPR is regarded as the buyer.
22.
Q:
Will BSD be payable on an instrument of exchange under which a non-residential property is exchanged for a residential property?
A:
If a non-HKPR uses his/her non-residential property to exchange for a residential property, BSD which is computed by reference to the value of the residential property will be payable on the instrument and the non-HKPR is regarded as the buyer.
23.
Q:
When should BSD be paid?
A:
BSD has to be paid within 30 days after the execution of the chargeable document. If the time for stamping of any instrument chargeable with BSD begins before the Stamp Duty (Amendment) Ordinance 2014 was published in the Gazette (i.e. 28 February 2014), that time for payment is to be replaced by a period of 30 days commencing immediately after the date of gazettal (i.e. on or before 30 March 2014). As 30 March 2014 is a Sunday, the due date for payment will be extended to 31 March 2014.
24.
Q:
Will the BSD paid be refunded if the buyer and seller cancel the agreement for sale after BSD was paid?
A:
A:
For e-stamping cases, the original statutory declaration (IRSD131) of the buyer(s)/transferee(s) and a copy of his/her Hong Kong Permanent Identity Card have to be submitted within 30 days after the stamping application is submitted.
In respect of paper application, the applicant has to submit the following:
| (i) | a duly completed form IRSD112; | |
| (ii) | the original statutory declaration (IRSD131); and | |
| (iii) | a copy of the applicant’s Hong Kong Permanent Identity Card. | |
26.
Q:
If a HKPR buyer/transferee acquired a residential property on or after 27 October 2012 and has stamped an instrument by e-stamping before the gazettal of the Amendment Ordinance, what documents are required for claiming exemption of BSD?
A:
The following documents are required:
| (i) | A duly completed Supplemental Information Form (Appendix B of Stamping Circular No. 03/2014); | |
| (ii) | A copy of the stamp certificate; | |
| (iii) | Original statutory declaration (IRSD131); and | |
| (iv) | A copy of the applicant’s Hong Kong Permanent Identity Card. | |
27.
Q:
If a HKPR buyer/transferee acquired a residential property on or after 27 October 2012 and has stamped an instrument by conventional stamping before the gazettal of the Amendment Ordinance, what documents are required for claiming exemption of BSD?
A:
The following documents are required:
| (i) | A duly completed Supplemental Information Form (Appendix B of Stamping Circular No. 03/2014); |
| (ii) | If the applicant chooses “Conventional Stamping” under Part 1 of the Supplemental Information Form, he/she is required to submit the original instrument for imprinting. If the applicant chooses “Stamp Certificate” under the said Part 1, he/she only has to submit a copy of the stamped instrument; |
| (iii) | Original statutory declaration (IRSD131); and |
| (iv) | A copy of the applicant's Hong Kong Permanent Identity Card. |
28.
Q:
What documents are required for claiming exemption of BSD for the reason of transfer of residential property between close relatives?
A:
The stamping must be by paper application, the applicant has to submit the following:
| (i) | duly completed form IRSD112 and IRSD118; |
| (ii) | a certified copy of the relevant documentary evidence showing the relationship of the parties, for example, birth certificate, marriage certificate, household register (戶籍簿), etc. issued by a competent authority in Hong Kong (such as the Immigration Department) or the concerned jurisdiction (such as the Ministry of Public Security (公安局) in Mainland China) as a proof for the relationship claimed. Other documents such as Notarial Certificate (公証書) would not be accepted; and |
| (iii) | the original statutory declaration (IRSD131) declaring that the buyer/ transferee was acting on his/her own behalf in acquiring the property. |
If the instrument was stamped before the gazettal of the Amendment Ordinance, the applicant is required to submit a duly completed Supplemental Information Form (Appendix B of Stamping Circular No. 03/2014) instead of the form IRSD 112.
29.
Q:
What documents are required for claiming exemption of BSD for the reason of acquiring residential property by a HKPR jointly with his/her close relative who is a non-HKPR?
A:
The stamping must be by paper application, the applicant has to submit the following:
| (i) | duly completed form IRSD112 and IRSD118; |
| (ii) | a certified copy of the relevant documentary evidence showing the relationship of the parties (see Q28 above); and |
| (iii) | the HKPR’s original statutory declaration (IRSD131) declaring that he/she is a HKPR and was acting on his/her own behalf in acquiring the property; and the original statutory declaration (IRSD131) made by the non-HKPR declaring that he/she is acting on his/her own behalf in acquiring the property. |
If the instrument was stamped before the gazettal of the Amendment Ordinance, the applicant is required to submit a duly completed Supplemental Information Form (Appendix B of Stamping Circular No. 03/2014) instead of the form IRSD112.
30.
Q:
Why is a HKPR buyer/transferee required to make statutory declaration in order to claim for exemption of BSD?
A:
Under the Amendment Ordinance, exemption of BSD can be granted when evidence is shown to the satisfaction of the Collector of Stamp Revenue that the buyer/transferee is a HKPR acting on his/her own behalf in acquiring the residential property.
Whether a person is a HKPR acting on his/her own behalf in the relevant acquisition is a matter within his/her personal knowledge. In order to examine any claim for the BSD exemption for this reason, IRD requires each applicant to declare, by virtue of the Oaths and Declarations Ordinance (Cap. 11), that he / she is a HKPR and was “acting on his/her own behalf” in the acquisition of the residential property.
31.
Q:
Why is a copy of the Hong Kong Permanent Resident Identity Card not sufficient to claim for exemption of BSD?
A:
In order to get the BSD exemption, apart from being a HKPR, the applicant has to act on his/her own behalf in acquiring the residential property. Therefore, mere submission of a copy of the Hong Kong Permanent Resident Identity Card is not sufficient.
32.
Q:
Who can take the applicants’ statutory declaration?
A:
The applicants can make their statutory declaration before a Notary Public, Justice of the Peace, solicitor or the Commissioner for Oaths at the IRD.
33.
Q:
What are the service hours and address of the oath and affirmation services provided by the IRD?
A:
In respect of the oath and affirmation services provided by the IRD, the service hours are from 9:00 am - 12:00 noon on Monday to Friday. If you would like to make a statutory declaration in the IRD, please call 2594 3250 or 2594 3067 to make an appointment in advance and bring along the completed Statutory Declaration (as specified in the form IRSD131) to visit 3/F on the Inland Revenue Centre at the scheduled time.
34.
Q:
Can a statutory declaration be made outside Hong Kong?
A:
Statutory declaration made by any person outside Hong Kong before a notary public, justice of the peace, or other person having authority to take or receive a declaration, confirming that he/she is a HKPR acting on his/her own behalf in acquiring the residential property in Hong Kong, is accepted for applying for exemption of BSD. The relevant statutory declaration form can be downloaded here (IRSD131A). As overseas jurisdictions might prescribe a different form for making statutory declaration, if the substance of the statutory declaration made using such a form is the same as that prescribed in form IRSD131A, the overseas statutory declaration form will be accepted by the Stamp Office.
35.
Q:
Will the IRD accept a statutory declaration made by using the sample form IRSD-xx1 that the IRD sent to the Law Society in February 2013?
A:
If the substance of the statutory declaration is not changed and the statutory declaration does not contain words such as "Draft", "Sample", "Specimen", or other words of similar meanings, the statutory declaration will be accepted.
36.
Q:
When should the applicant submit the statutory declaration if the instrument has already been stamped before the gazettal of the Amendment Ordinance?
A:
The statutory declaration should be submitted on or before 30 April 2014. However, if due to special circumstances, the statutory declaration cannot be submitted by 30 April 2014, the applicant may apply to the IRD for an extension of time to submit the statutory declaration. The IRD will consider the application on a case by case basis.
37.
Q:
If there is more than one buyer/transferee in the acquisition of a residential property, shall each and every buyer/transferee submit a statutory declaration in support of the exemption of BSD claim?
A:
For exemption of BSD claim by reasons of acquiring residential property by a number of HKPRs together, or by a HKPR jointly with his/her non-HKPR close relative, or transfer of residential property between close relatives, every buyer/transferee has to submit a statutory declaration declaring that he / she is a HKPR, if applicable, and is acting on his / her own behalf in acquiring the residential property.