2025-03-12 28Hse Editor
The Financial Secretary, Paul Chan, announced in the Budget an adjustment to the stamp duty threshold for properties. The value cap for the HK$100 stamp duty has been raised from HK$3 million to HK$4 million, easing the burden on homebuyers. This adjustment is expected to benefit approximately 15% of property transactions.
Following this announcement, some buyers have sped up their home purchases. According to 28Hse, listings and inquiries for lower-priced properties have significantly increased. In particular, inquiries for properties priced between HK$3 million and HK$4 million have risen by 5% to 10%, mainly focused on areas like Tuen Mun, Yuen Long, Tin Shui Wai, and Tsuen Wan.
Previously, purchasing a property valued between HK$3.29 million and HK$4 million required a 1.5% stamp duty. Now, this has been reduced to a flat HK$100. For example, buying a HK$3.5 million property used to incur a stamp duty of HK$52,500. Under the new policy, the stamp duty is reduced by almost 100%, now requiring only HK$100.
Many people are unaware of when exactly stamp duty must be paid. If a formal sales and purchase agreement is signed within 14 days of the provisional agreement, the contract is legally binding even if not stamped. However, if the formal agreement is signed more than 14 days after the provisional agreement, the contract must be stamped to be legally valid, which costs HK$100.
In general, when signing the formal sales and purchase agreement, the lawyer will request the buyer to bring the original provisional agreement, a cheque for the stamp duty, and the deposit. The lawyer will then handle the remaining property purchase procedures.
For property transactions, law firms typically handle the stamping process on behalf of buyers. However, buyers can also choose to handle it themselves by submitting documents to the Stamp Office in person or completing the process online. If you choose to do it yourself, it’s important to submit the documents on time to avoid penalties.
According to current regulations, if the formal sales and purchase agreement is signed within 14 days of the provisional agreement, stamp duty must be paid within 30 days of signing the formal agreement. If the formal agreement is signed more than 14 days after the provisional agreement, stamp duty must be paid within 30 days of signing the provisional agreement.
If stamp duty is not paid on time, penalties will apply. If late by less than one month, the penalty will be twice the stamp duty amount. If late by one to two months, the penalty will be four times the stamp duty amount. If late by more than two months, the penalty will be ten times the stamp duty amount.
If you miss the deadline, buyers can submit a written explanation to request leniency. The Stamp Office will assess the situation and may reduce the penalty if the delay was unintentional and the explanation is reasonable. However, the final decision rests with the authorities.
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