Hong Kong Treasury Bureau: No plans to allow stamp duty on non-residential property transactions to be paid in installments

The Zhitong Finance App learned that on July 30, the Secretary for Financial Services and the Treasury of Hong Kong, Hui Ching-yu, said in response to questions from members that there are currently no plans to allow stamp duty on non-residential property transactions to be paid in installments; there are three main considerations. First, the current stamp duty for non-residential property transactions ranges from HK$100 to a maximum tax rate of 4.25%, accounting for only a very small portion of the transaction cost, while the maximum tax rate only applies to transactions where the sale price or value of the property is higher than about HK$21.74 million. Since stamp duty is generally paid by buyers, they do not believe that the current arrangement for payment of stamp duty will put financial pressure on non-residential property owners.

Second, according to the Stamp Duty Ordinance, the Director of Stamp Duty must pay the stamp before stamp duty has been paid. In other words, documents that have been paid in installments but have not paid stamp duty cannot be stamped. Generally speaking, unstamped documents cannot be accepted as evidence in legal proceedings in civil disputes, nor can relevant documents be registered in the Land Registry.

Third, trading in the non-residential property market has been relatively stable over the past year. According to the Hong Kong Inland Revenue Department, there were about 3,600 stamping applications involving non-residential properties in the first quarter of 2025/26, an increase of about 17% over the same period last year; the total amount of transactions involved also increased by more than 30% to about HK$20 billion. As a result, they saw no need to change the arrangement for paying stamp duty on non-residential properties.

Hui Ching-yu said that the Hong Kong Government has been promoting foreign investment and keeping a close eye on the situation and development of the non-residential property market. The Hong Kong Monetary Authority currently has no restrictions on mortgage payment ratios and loan ratios for investors outside Hong Kong. When considering a customer's loan application, each bank will consider a range of factors, including the bank's business strategy, loan use, customer credit history, repayment ability, etc., to comprehensively evaluate whether to grant a loan and the terms of the relevant loan. Whether a bank will provide mortgage loan benefits (such as a cash rebate) to an applicant is a bank's commercial decision.

The “New Capital Investor Entry Scheme” currently allows applicants to invest in residential and non-residential real estate, and the maximum amount calculated as total investment is HK$10 million, which already accounts for one-third of the minimum investment requirement of the scheme. The Hong Kong Government will continue to review the applicant's investment situation and review the relevant arrangements in due course.

The Hong Kong Government raised the upper limit of property value subject to HK$100 stamp duty from HK$2 million to HK$3 million at the end of February 2023, and adjusted other stamp duty levels. The maximum property value subject to HK$100 stamp duty will be further raised to HK$4 million at the end of February 2025. These measures have all helped reduce stamp duty on some residential and non-residential property transactions. Hong Kong currently has no plans to adjust stamp duty to attract foreign investment.

Currently, rates for non-residential properties are levied at 5% of the rateable value of the property. The rate is the same as for residential properties with a rateable value of HK$550,000 or less. The Hong Kong Valuation Department comprehensively re-evaluates the rateable value of all property units in Hong Kong, including non-residential properties, every year to ensure that rates and ground rent are levied in accordance with the latest market rent levels.

According to the Hong Kong Valuation Department, the rent index for private offices fell by about 18% in the five years from October 2019 to October 2024. The rateable value of private office buildings fell by about 16% during the same period. The above figures show that the Hong Kong Valuation Department's assessment has appropriately reflected recent changes in market rents and lowered rates levied on non-residential properties. Furthermore, the progressive rate system implemented since 2025 does not apply to non-residential properties, and the levy rate remains at 5%. Therefore, they believe that the current rate levy rate for non-residential properties is at a reasonable level, and that the annual revaluation of the rateable value also effectively reflects the latest situation in the property market.