Table of Contents
FAQ
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What is stamp duty?
Stamp Duty in Hong Kong is a tax levied by the Hong Kong government, mainly on certain legal documents or transactions. The purpose of stamp duty is to provide revenue to the government and regulate market activities. The following is a detailed explanation of Hong Kong stamp duty:
1. Basic Concepts of Stamp Duty
Stamp duty is an indirect tax usually levied when a document is signed or a transaction is completed. In Hong Kong, stamp duty mainly applies to the following types of transactions:
Property Transactions: For example, the sale and purchase of residential or non-residential properties, lease agreements, etc.
Stock Trading: Involving the transfer of shares of Hong Kong listed companies.
Other files: Such as the transfer of certain business contracts or legal documents.
Documents subject to stamp duty must be reported and paid to the Hong Kong Inland Revenue Department (IRD) within a prescribed time (usually within 30 days of the transaction), otherwise a penalty may be required. -
What is the role of property stamp duty?
Stamp duty is a tax levied by the Hong Kong government on specific transaction documents, mainly including property sales, leases and stock transfers. If stamp duty is not paid as required, the legal validity of the relevant documents will be affected, for example, they may not be recognized in court. The tax must be paid to the Hong Kong Inland Revenue Department within a certain period (usually 30 days) after the transaction is completed.
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Are there assorted other property-related stamp duties?
Lease stamp duty:Applicable to rental agreements, such as a 1-year lease, the tax rate is 0.25% of the annual rent.
Stock stamp duty: Both parties of a stock transaction need to pay 0.13% of the transaction amount. For example, a transaction of HKD 1 million requires a tax of HKD 1,300. -
Why is stamp duty important?
Documents without stamp duty may be considered invalid in law. For example, if taxes have not been paid in a sales agreement, the court may refuse to recognize its validity in a dispute.
In addition, stamp duty is also an important source of revenue for the government and is used to regulate the real estate market and prevent overheated prices.
