Stamp Duty Refund for Redevelopment

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When can a developer apply for a refund of buyer’s stamp duty (“BSD”) and a partial refund of ad valorem stamp duty (“AVD”) paid on instruments executed on immovable properties acquired for redevelopment?

The developer can apply for the refund of BSD and partial refund of AVD if the developer, alone or jointly with its associated body corporate, has obtained ownership of the entire lot to be redeveloped (including the immovable properties in question) and:

has obtained consent to commence foundation works for the lot (whether or not together with any other lot) from the Building Authority under the Buildings Ordinance (Cap. 123); or
has-

1. demolished or caused to be demolished all buildings (if any) existing on the lot, other than a building the demolition of which is prohibited under any Ordinance; and
2. 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 developer has applied to the Building Authority for consent to commence foundation works but has not obtained the consent, and the building plans for the new development have not yet been approved, can the developer apply for the refund?

No. The application will not be considered a valid one and will be rejected. Please note that building plans approved in-principle will not be regarded as approved building plans.

What does the developer need to submit when applying for the refund?

The developer needs to submit a completed application form [i.e. IRSD125B (for individual person) or IRSD125C (for body corporate)] together with the relevant supporting documents specified in Annex I to the application form.

Can the developer submit some documents first and then submit the rest later?

The application will be considered valid only after all necessary documents have been submitted.

Who can apply for the refund?

Applications may be made by the developer in person, by the developer’s solicitor, or through an authorized representative of the developer. However, the capacity of the person signing the application form should be specified and supporting documents should be provided.

How long does it take to process a refund application?

It takes about 2 months after receiving all necessary documents and information.

If information is required from parties other than the developer (such as the confirmation from the Rating and Valuation Department on the property valuation), the 2-month period counts from the date on which the Stamp Office receives the information. In addition, the Stamp Office will inform the developer, within 1 month after receiving a valid application, of the need to obtain information from other parties and what information is required.

How is the refundable amount of AVD paid in respect of properties acquired for redevelopment calculated?

For details, please refer to the illustrative examples in Annex II to the application form.

Is there any requirement that applications for refund of BSD / partial refund of AVD paid for all units within the same lot acquired for redevelopment must be submitted in one go?

No. As long as the conditions for refund of stamp duty are satisfied, the developer may make separate sets of refund applications for different instruments executed for the acquisition of units within the same lot.

If a developer submits two or more refund applications in one go for instruments executed for the acquisition of units within the same lot, does the developer need to submit a full set of supporting documents for each application?

No. Supporting documents common to all the applications (such as a copy of latest annual return of the developer) are required to be submitted only once.