Sweeping Relief: Hong Kong Abolishes Property-Related Stamp Duties to Revitalize Market
- a22162
- Oct 7
- 5 min read
Hong Kong Abolishes Property Stamp Duties
Sweeping Relief: Hong Kong Abolishes Property-Related Stamp Duties to Revitalize Market
The landscape of Hong Kong's property market has undergone a historic transformation. Following a series of adjustments in 2023, the government announced the complete abolition of all demand-side management measures for residential properties, effective from February 28, 2024.
This monumental decision—a clear signal of intent to revitalize the housing sector—immediately removes significant financial barriers for local and international buyers alike. This article breaks down the key changes, their implications, and what they mean for you, the investor or homeowner.
1. The End of Demand-Side Stamp Duties
The most impactful change is the scrapping of three key stamp duties that had been in place for over a decade to curb speculation and housing demand:
Former Duty | Rate (Prior to Feb 28, 2024) | Who Paid It? | What is the Status Now? |
Buyer's Stamp Duty (BSD) | 7.5% (reduced from 15% in Oct 2023) | Non-Permanent HK Residents and Corporate Buyers | Completely Abolished |
New Residential Stamp Duty (NRSD) | 7.5% (reduced from 15% in Oct 2023) | HK Permanent Residents who own other residential property | Completely Abolished |
Special Stamp Duty (SSD) | 10% to 20% | Sellers who dispose of property within 2 years | Completely Abolished |
What this means:
For Non-Permanent Residents & Foreign Investors: You no longer face the punitive extra 7.5% BSD, making residential property acquisition immediately more affordable and attractive.
For Multiple Property Owners (Local): The 7.5% NRSD on second or subsequent residential properties is gone, removing a major hurdle for portfolio expansion.
For Short-Term Sellers: The removal of the SSD eliminates the financial penalty for selling a residential property within the first two years, providing much-needed liquidity and flexibility to the market.
For property transactions executed on or after February 28, 2024, the only significant stamp tax liability remains the standard Ad Valorem Stamp Duty (AVD) at the lower Scale 2 rates.
2. Streamlined Ad Valorem Stamp Duty (AVD)
While the three punitive duties have been removed, the standard AVD for property transactions remains, but it is now unified under the simpler Scale 2 rates for all buyers and properties, residential or non-residential.
Previously, residential properties for non-HKPRs were subjected to a flat 15% (later 7.5%) rate. Now, all residential properties revert to the tiered Scale 2 structure, ranging from HK$100 up to a maximum of 4.25% of the consideration/value, irrespective of the buyer's resident status or existing property ownership.
In a separate move, the government also raised the threshold for the lowest AVD band. With effect from February 26, 2025, the maximum property value subject to a flat HK$100 stamp duty was increased from HK$3 million to HK$4 million. This change provides an immediate, substantial tax saving for first-time or lower-end property buyers.
3. Impact on the HK Property Market and Economy
The comprehensive scrapping of these long-standing market cooling measures is expected to have several major effects:
Boosted Transactions: Lower transactional costs are a powerful incentive, likely leading to an immediate increase in trading volume as potential buyers who were priced out re-enter the market.
Enhanced Investment Appeal: The removal of BSD and SSD is a huge win for international investors and corporate buyers, significantly enhancing the competitiveness of Hong Kong's property market compared to other global financial hubs.
Market Flexibility: The removal of SSD eliminates the "lock-up" period, allowing property owners greater freedom to sell when conditions are right, increasing market liquidity.
Attracting Talent: These measures complement other government initiatives to attract top global talent, making it easier and cheaper for non-local professionals to settle and invest in Hong Kong.
Summary of Key Stamp Tax Changes
Tax/Measure | Effective Date | Change |
Buyer's Stamp Duty (BSD) | February 28, 2024 | Abolished |
New Residential Stamp Duty (NRSD) | February 28, 2024 | Abolished |
Special Stamp Duty (SSD) | February 28, 2024 | Abolished |
Ad Valorem Stamp Duty (AVD) | February 28, 2024 | All residential properties now taxed at Scale 2 Rates (max 4.25%) |
AVD HK$100 Threshold | February 26, 2025 | Max property value for HK$100 duty raised from HK$3M to HK$4M |
Property buyers and investors should consult with qualified legal and tax professionals in Hong Kong to understand the specific implications of these changes on their individual circumstances.
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Sweeping Relief: Hong Kong Abolishes Property-Related Stamp Duties to Revitalize Market
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Keywords: Hong Kong Stamp Duty Abolition, Residential Property Tax Hong Kong, Buyer's Stamp Duty (BSD) Removal, Special Stamp Duty (SSD) Hong Kong, New Residential Stamp Duty (NRSD) Lifted, HK Property Market Changes 2024, Hong Kong Tax Relief
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