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Unless specifically exempted or otherwise provided, the New AVD is payable on an agreement for sale for the acquisition of any residential property or non-residential property, if the agreement is executed on or after 23 February 2013.  It also applies to a conveyance on sale of such a property executed on or after that date (unless the related agreement for sale was executed before 23 February 2013).

However, the New AVD does not apply to an agreement/conveyance for a residential property where the purchaser/transferee is a Hong Kong permanent resident (HKPR) acting on his own behalf and he does not own any other residential property in Hong Kong at the time of acquisition; only the old AVD rates will apply to such agreement/conveyance.  See also Question 12 below.

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Unless specifically exempted or otherwise provided (see Question 12 below), the New AVD will apply to the acquisition of all non-residential properties.

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(Subject to marginal relief at the turn of each band.  See Question 34 for a complete table of the New AVD rates.)                                      

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In line with the existing regime, both the buyer and the seller will be jointly and severally liable to pay the New AVD.  In other words, the buyer and the seller will have the same extent of liability, under the law, to pay for any ad valorem stamp duty payable on the chargeable instruments, irrespective of any agreement to the contrary made between them.

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The seller of a residential property should be aware that if any stamp duty is under-paid on the chargeable agreement for sale/conveyance on sale, the parties to the instrument will be jointly and severally liable to pay the under-paid stamp duty together with the applicable penalty.  Therefore, where the parties to a residential property transaction wish to claim that the New AVD does not apply to the instrument, the seller should understand that he runs the risk of having to pay for any under-paid AVD and penalty should it turn out that the buyer is not eligible for the lower AVD rates.

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For the purposes of the New AVD, a person “owns” a residential property if he is the beneficial owner of such property, or any share or interest thereof.  Therefore, a person “owns” a residential property even if his residential property is held in the name of a trustee.  A person “owns” a residential property if he jointly owns the property with another person/other persons, or is a co-owner thereof.  A person is also a beneficial owner of a residential property if he has signed a chargeable agreement for sale for the purchase of that property.

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When presenting an agreement for sale/conveyance on sale in respect of a residential property transaction to the Stamp Office for stamping, for which a claim is made that the New AVD does not apply, the purchaser will be required to furnish a statutory declaration to declare whether he owns any other residential property in Hong Kong.  The Stamp Office will verify the correctness of the information deposed from its available information, including a check with the Land Registry records.

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For stamp duty purposes, a PASP is a chargeable agreement for sale.  The parties who entered into a PASP for acquisition of a property before 23 February 2013 is regarded as having “acquired” the property before that date.  Hence the New AVD will NOT apply to the acquisition of the property.

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Same as that for the Buyer’s Stamp Duty, for the purposes of the New AVD, HKPRs mainly include holders of valid Hong Kong Permanent Identity Cards (PICs) as defined under the Registration of Persons Ordinance (Cap. 177).  HKPRs also include the aged, the blind or the infirm who are not required to apply for an identity card under regulation 25(e) of the Registration of Persons Regulations (Cap. 177A) and are entitled to be issued with a PIC if they make an application for a PIC.

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If a limited company, regardless of the residency status of its shareholders and directors, acquires a residential property or non-residential property on or after 23 February 2013, the New AVD will apply unless the transaction is specifically exempted from the New AVD.

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If a HKPR wishes to claim that the New AVD does not apply to the acquisition of a residential property by him on the ground that he does not own any other residential property at the time of acquisition, he must act on his own behalf in the transaction. Therefore, an agreement for sale signed by any person in the capacity of a trustee on behalf of another person is chargeable with the New AVD.

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It is proposed that the New AVD, subject to legislation, will not be applicable under the following circumstances –

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The New AVD is not applicable as the new measure will only affect acquisitions made on or after 23 February 2013.  The stamp duty payable will be based on the old rates.

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The New AVD is not applicable.

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If a residential property is jointly acquired by more than one person and any of the purchasers already owned a residential property in Hong Kong at the time of acquisition, the New AVD will be payable on the entire stated consideration or full value of the property, whichever is the higher, regardless of the respective share of interest of the purchasers in the property acquired.  The fact that the joint owner is a close relative does not make any difference in this respect.

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In the above situation, the PASP will be chargeable to AVD at the old rates as usual (alternatively, such duty may be chargeable on the ASP instead under certain circumstances).  Upon adding the spouse’s name, the ASP will be charged with another AVD also at the old rates, which is computed by reference to the stated consideration or the value of the property, whichever is the higher, less half of the stamp duty representing the share of the interest of the HKPR in the property.

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In the above situation, the adding of the spouse’s name will be exempt from all AVD.

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The New AVD is not applicable.  A property (residential or non-residential) which is inherited from a deceased person’s estate under a will, the law of intestacy or the right of survivorship by a beneficiary is not chargeable with stamp duty.

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The New AVD will apply to the agreement for sale/conveyance on sale in respect of Property Y since at the time of its acquisition, Mr B owns another residential property, i.e. Property X.  How Mr B became owner of Property X is not relevant.

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The old rate applies to the Agreement for Sale in respect of the 1st Property since the HKPR does not own any other residential property as at the time of its acquisition.  However, the New AVD applies to the agreement for sale in respect of the 2nd Property since the HKPR is the beneficial owner of the 1st Property at the time of its acquisition.  A person becomes the beneficial owner of a residential property upon signing a chargeable agreement for sale for the acquisition of that property.

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In the above scenario, Ms D has acquired part of the property from Mr C on or after 23 February 2013 when she signs the ASP.  As Ms D is not a close relative of Mr C and not a HKPR herself, the New AVD will be applicable to the ASP in respect of the property transferred.  Thus, the ASP will have to be stamped with the New AVD which is computed by reference to the stated consideration or the value of the property, whichever is the higher, less half of the stamp duty representing the share of the interest of Mr C in the property, in addition to any other stamp duty (such as Buyer’s Stamp Duty) to which the ASP may be chargeable.

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If Mr E does not own any other residential property in Hong Kong at the time of acquisition of the residential property and he is acting on his own behalf in acquiring the residential property, the New AVD will not be applicable.  Whether or not Mr E owns any non-residential property at the material time is not relevant.

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For the purposes of the New AVD, residential property located outside Hong Kong will not be relevant.  If Mr F does not own any other residential property in Hong Kong and he is acting on his own behalf in acquiring the residential property, the New AVD will not be applicable.

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A HKPR who is acquiring a residential Property A while seeking to dispose of another one  Property B (his only other residential property) will be subject to the New AVD as usual in the first instance, but he may seek a refund of the stamp duty paid in excess of that computed under the old rates upon proof that Property B has been disposed of within six months from the date when he executed the agreement to acquire Property A.  Furthermore, the disposal of Property B must have been completed before a refund could be claimed.  There is also a general time limit of 2 years for claiming refunds, from the date of execution of the instrument (in this case, the agreement for purchase of Property A) in respect of which the refund is claimed.  This concession primarily applies to change of residence cases.

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For stamp duty purposes, a person who entered into an agreement for sale and purchase for disposal of a property is regarded as having disposed of the property.   Therefore, if a HKPR has disposed of all of his existing residential properties before acquiring a new one, the old AVD rates will apply to the acquisition.  However, if the HKPR fails to complete any of the disposal transactions (i.e. where the agreement for sale is cancelled, annulled or rescinded or is otherwise not performed), the difference between the old and new AVD rates on the newly acquired property will be recouped.

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Subject to legislation being passed, it is proposed that the same relief as for acquisitions of residential properties for redevelopment under the Buyer’s Stamp Duty regime will apply equally to acquisitions of residential and non-residential properties for development under the New AVD regime.  Part of the New AVD paid in excess of that payable under the old rates would be refunded.

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Subject to legislation being passed, a chargeable agreement for sale/conveyance on sale is to be stamped with the New AVD within 30 days after the date on which the agreement for sale/conveyance on sale is executed.  

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Before the proposed legislation is enacted, instruments relating to residential properties chargeable with the New AVD will be stamped by reference to the old rates first.  The additional AVD, representing the difference between the old rates and the new rates, will have to be paid within 30 days commencing immediately after the date of gazettal of the amendment ordinance.

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Before the proposed legislation is enacted, stamp duty based on the old rates will be payable on the conveyances on sale within 30 days after the date on which the conveyances are executed.  The additional AVD, representing the difference between the old rates and the new rates, has to be paid within 30 days commencing immediately after the date of gazettal of the amendment ordinance.

Provided that the conveyance on sale is duly stamped, the related preceding agreement for sale will be chargeable with stamp duty of $100 only.  If there are other preceding chargeable agreements for sale that do not result in the execution of conveyances on sale (e.g. confirmor cases), stamp duty on all such chargeable agreements based on the New rates will have to be paid within 30 days commencing immediately after the date of gazettal of the amendment ordinance.

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In line with the existing regime, in case the agreement for sale is cancelled, revoked or rescinded or is otherwise not performed (other than for the purpose of a further resale such as confirmor sale or nomination of another buyer), the party who paid the AVD can apply for refund of the duty paid within 2 years after the agreement is cancelled, etc.

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The agreement which was executed first at a point in time on that day will be charged at the old rates, whereas all the other agreements will be charged at the new rates.  The HKPR would have to declare, with respect to each agreement for sale executed by him, for which exemption from the New AVD is claimed, whether he “owns” any other residential property at that particular point in time.

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Stamp duty is chargeable on a document basis.  As there is only one chargeable agreement in the transaction, all the property units comprised in that instrument will be charged at the old rates.  In fact, all the property units will be regarded as a single bunch of “residential property” which is the subject matter of the chargeable agreement in question.

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No.  Stamp duty is chargeable on an instrument by reference to the consideration stated in the instrument or the market value of the property as at the date of execution of the instrument.  The stamp duty charge will not be affected by any subsequent changes in the market value of the property, whether upwards or downwards.

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The complete table of the New AVD rates is as follows-