Stamp duty is a significant cost in any Hong Kong property transaction. The amount you pay depends on several factors: the property price, the buyer's status (first-time buyer, Hong Kong permanent resident, non-permanent resident, or company), and the holding period for resale. The system has multiple categories, each with its own rates and exemptions. Understanding these categories helps you budget accurately and avoid unexpected tax liabilities. This article explains the main stamp duty categories in Hong Kong: Ad Valorem Stamp Duty (AVD), Special Stamp Duty (SSD), Buyer's Stamp Duty (BSD), and the new residential property stamp duty changes introduced in 2024.
The Inland Revenue Department (IRD) collects stamp duty on property transactions. The rates and rules have changed several times in recent years, often as part of government measures to cool the property market. As of 2025, the key categories are:
Ad Valorem Stamp Duty (AVD)
Ad Valorem Stamp Duty, or AVD, is the basic stamp duty payable on most property transactions. The rate depends on whether the buyer is a Hong Kong permanent resident (HKPR) and whether they already own any residential property in Hong Kong. AVD is calculated on the stated consideration or the market value of the property, whichever is higher.
Scale 1 (Higher rates)
Scale 1 applies to buyers who are not HKPRs, or to HKPRs who already own residential property in Hong Kong at the time of purchase. The rates are progressive and range from 7.5% to 15% of the property value. The current Scale 1 rates (as of 2025) are:
- First HKD 3 million: 7.5% (minimum duty HKD 225,000)
- HKD 3,000,001 to HKD 4,500,000: 10.5%
- HKD 4,500,001 to HKD 6,000,000: 12%
- HKD 6,000,001 to HKD 9,000,000: 13.5%
- HKD 9,000,001 to HKD 20,000,000: 15%
- Above HKD 20,000,000: 15% (flat rate)
For example, a HKPR buying a second residential property valued at HKD 8,000,000 would pay AVD at Scale 1 rates: 13.5% of HKD 8,000,000 = HKD 1,080,000.
Scale 2 (Lower rates)
Scale 2 applies to HKPRs who do not own any residential property in Hong Kong at the time of purchase. These are effectively first-time buyers or buyers who have sold their existing property before purchasing a new one. The Scale 2 rates are much lower, starting at 1.5% for properties up to HKD 3 million and rising to 4.25% for properties over HKD 22 million. The current Scale 2 rates (as of 2025) are:
- First HKD 3 million: 1.5% (minimum duty HKD 100)
- HKD 3,000,001 to HKD 4,500,000: 2.25%
- HKD 4,500,001 to HKD 6,000,000: 3%
- HKD 6,000,001 to HKD 9,000,000: 3.75%
- HKD 9,000,001 to HKD 20,000,000: 4.25%
- Above HKD 20,000,000: 4.25%
For example, a HKPR first-time buyer purchasing a property valued at HKD 5,500,000 would pay AVD at Scale 2 rates: 3% of HKD 5,500,000 = HKD 165,000.
Calculating AVD: Key points
- The duty is rounded down to the nearest HKD 100.
- If the stated consideration is lower than the market value, the IRD will use the higher of the two.
- For properties acquired through assignment (e.g., from a developer), the duty is payable on the total consideration including any building cost allowances or rebates.
- Buyers must submit a stamp duty return and pay the duty within 30 days of the transaction date (usually the date of the agreement for sale).
For a broader overview of the buying process, see our complete guide to buying property in Hong Kong.
Special Stamp Duty (SSD)
Special Stamp Duty (SSD) is a tax on the resale of residential properties within a short holding period. It was introduced in 2010 to curb short-term speculation. The rate depends on how long the seller has owned the property before selling it. The holding period is measured from the date of the initial agreement for sale and purchase (or assignment) to the date of the subsequent agreement for sale.
SSD rates (as of 2025)
- If sold within 6 months: 20% of the stated consideration (or market value, whichever is higher)
- If sold after 6 months but within 12 months: 15%
- If sold after 12 months but within 24 months: 10%
- If sold after 24 months: no SSD
SSD applies to all residential properties acquired on or after 27 October 2012 (when the higher SSD rates were introduced). Properties acquired before that date may be subject to earlier, lower SSD rates. SSD is payable by the seller, but in practice it affects the net proceeds from the sale and may influence the asking price.
Exemptions and special cases
- SSD does not apply to non-residential properties (e.g., commercial, industrial, car parks).
- If the seller is a Hong Kong permanent resident and the property was their sole residence (they lived there continuously for at least 12 months before the sale), they may apply for a refund of SSD. This is a relief measure for genuine home movers.
- SSD is calculated on the same basis as AVD: the higher of the consideration or market value.
- If the transaction is cancelled (e.g., a default by the buyer), the seller may be able to recover the SSD paid, subject to IRD approval.
Buyer's Stamp Duty (BSD)
Buyer's Stamp Duty (BSD) is an additional stamp duty imposed on certain buyers of residential property in Hong Kong. It was introduced in October 2012 to curb demand from non-local buyers and companies. The current BSD rate is 7.5% of the property value (stated consideration or market value, whichever is higher).
Who pays BSD?
BSD is payable by:
- Any person who is not a Hong Kong permanent resident (including non-permanent residents, foreign nationals, and residents of Macau, Taiwan, or mainland China).
- Any company (regardless of where it is incorporated) that acquires residential property in Hong Kong.
- Any person acting as a nominee for a non-HKPR or a company.
Exemptions from BSD
- Hong Kong permanent residents buying residential property in their own name (not as a company) are exempt from BSD, even if they already own other residential property.
- Non-residential property transactions are not subject to BSD.
- Certain transfers between spouses or close relatives may be exempt, subject to IRD approval.
- If a non-HKPR becomes a HKPR within 12 months of the purchase, they can apply for a refund of BSD (less a handling fee). This is common for people who are in the process of obtaining permanent residency.
For example, a mainland Chinese buyer (not a HKPR) purchasing a residential property valued at HKD 10,000,000 would pay BSD of HKD 750,000 on top of AVD (at Scale 1 rates, unless they qualify for Scale 2 as a first-time buyer, which they do not if they are not a HKPR). The total stamp duty could exceed HKD 2 million.
Understanding these categories is essential when how the Hong Kong property market works.
New Residential Property Stamp Duty (NRSD) and 2024 Changes
In the 2024-25 Budget, the Financial Secretary announced the removal of several stamp duty measures to revive the property market. As of 28 February 2024, the following changes took effect:
- BSD abolished for non-HKPRs and companies: Previously, BSD was 15% for non-HKPRs and companies. It has been reduced to 0% for all buyers, effective immediately.
- SSD abolished for all residential resales: The Special Stamp Duty (SSD) has been completely removed. Sellers can now resell residential properties without any time-based penalty.
- AVD Scale 1 rates reduced: The highest AVD rate for buyers who already own property (Scale 1) was cut from 15% to 7.5% (the previous BSD rate). This effectively means that buyers who would have paid BSD + AVD now pay only AVD at the new lower Scale 1 rate.
- First-time buyers remain at Scale 2: The lower AVD rates for first-time HKPR buyers (Scale 2) remain unchanged.
These changes mean that, as of 2025, the total stamp duty for most buyers is significantly lower than before. A non-HKPR buyer now pays only AVD at Scale 1 rates (7.5% to 15%) instead of AVD + BSD (which could total up to 30%). A seller no longer pays SSD on any resale, regardless of holding period.
Stamp Duty for Non-Residential Properties
Non-residential properties (commercial, industrial, retail, car parks) are subject to a simpler stamp duty regime. There is no BSD or SSD for non-residential properties. The AVD rates for non-residential properties are the same as the residential Scale 2 rates (1.5% to 4.25%) but apply to all buyers regardless of their status or property ownership. The rates are:
- First HKD 3 million: 1.5%
- HKD 3,000,001 to HKD 4,500,000: 2.25%
- HKD 4,500,001 to HKD 6,000,000: 3%
- HKD 6,000,001 to HKD 9,000,000: 3.75%
- Above HKD 9,000,000: 4.25%
For example, a company buying a commercial unit for HKD 5,000,000 would pay AVD of 3% = HKD 150,000. No BSD or SSD applies.
Practical Examples
Example 1: First-time HKPR buyer (residential)
Property price: HKD 8,000,000. Buyer: Ms. Chan, a HKPR who has never owned property in Hong Kong. She qualifies for Scale 2 rates. Stamp duty: 3.75% of HKD 8,000,000 = HKD 300,000. No BSD or SSD applies. Total stamp duty: HKD 300,000.
Example 2: HKPR buyer already owning property (residential)
Property price: HKD 15,000,000. Buyer: Mr. Lee, a HKPR who already owns a flat. He pays AVD at Scale 1 rates: 15% of HKD 15,000,000 = HKD 2,250,000. No BSD or SSD. Total stamp duty: HKD 2,250,000.
Example 3: Non-HKPR buyer (residential, after 2024 changes)
Property price: HKD 20,000,000. Buyer: Ms. Wang, a mainland Chinese national (not HKPR). She pays AVD at Scale 1 rates: 15% of HKD 20,000,000 = HKD 3,000,000. No BSD (abolished in 2024). No SSD (abolished). Total stamp duty: HKD 3,000,000.
Example 4: Company buyer (residential, after 2024 changes)
Property price: HKD 50,000,000. Buyer: ABC Limited (a company). It pays AVD at Scale 1 rates: 15% of HKD 50,000,000 = HKD 7,500,000. No BSD (abolished). Total stamp duty: HKD 7,500,000.
Example 5: Seller reselling within 12 months (after 2024 changes)
Property purchased for HKD 10,000,000 in January 2025, resold in November 2025 for HKD 12,000,000. Seller pays no SSD (abolished). The seller is liable for profits tax (if a trader) or may be subject to property tax, but stamp duty on the sale is only the nominal HKD 100 or HKD 200 for the assignment. The buyer pays AVD based on their status.
How to Pay Stamp Duty
Stamp duty is payable to the Inland Revenue Department within 30 days of the date of the agreement for sale and purchase (or the assignment, if earlier). The process is:
- Complete the stamp duty return form (Form IRSD 125 for residential, Form IRSD 126 for non-residential).
- Submit the form and the agreement to the Stamp Office (either in person at the Wan Chai Revenue Tower or by post).
- Pay the duty by cheque, bank draft, or electronic payment (e.g., via the IRD's eTAX system). Cash is not accepted for amounts over HKD 100,000.
- Receive the stamped agreement back. The stamp certificate is proof that duty has been paid and is required for registration of the property at the Land Registry.
Failure to pay within 30 days results in a penalty: a fixed penalty of HKD 200 plus an additional penalty of up to 10 times the duty unpaid if the delay exceeds 1 month. The IRD has the power to impose further penalties and interest.
For more detail on price lists and how to read them, see deciphering price lists.
Common Questions and Misunderstandings
Is stamp duty payable on the full purchase price or the mortgage amount?
Stamp duty is payable on the total consideration (purchase price) stated in the agreement, not the mortgage amount. Even if you take a mortgage for 90% of the price, you pay duty on 100%.
What if the property is sold below market value (e.g., a gift to a relative)?
The IRD will assess stamp duty on the market value of the property if the stated consideration is lower than the market value. For gifts, the duty is based on the market value. There is a limited exemption for transfers between spouses (subject to conditions).
Do I pay stamp duty on a property I inherit?
Inheritance is not a transfer subject to stamp duty. However, if you subsequently sell the inherited property, you may be liable for stamp duty on the sale (the buyer pays AVD, and you as seller pay no SSD after 2024).
What about property bought through a company?
Before February 2024, a company buying residential property paid BSD of 15% plus AVD at Scale 1. Now, a company pays only AVD at Scale 1 (7.5% to 15%). The company is also subject to profits tax on any gains from property trading (not capital gains, which are not taxed in Hong Kong).
Can I get a refund of stamp duty if I sell the property quickly?
No. Stamp duty is not refundable once paid, except in specific circumstances such as the cancellation of the transaction (with IRD approval) or the BSD refund for non-HKPRs who become HKPRs within 12 months. SSD refunds for genuine home movers were available before the 2024 abolition, but now SSD no longer applies.
For a deeper look at market cycles and how they affect pricing, read our article on market trends and cycles.
Conclusion
Hong Kong's stamp duty system has multiple categories, but the 2024 reforms simplified it significantly. The abolition of BSD and SSD means that buyers now pay only AVD, with rates depending on their status and property ownership. First-time HKPR buyers enjoy the lowest rates (Scale 2), while other buyers pay higher Scale 1 rates. Non-residential property buyers pay a flat 1.5% to 4.25% regardless of status.
When budgeting for a property purchase, always include stamp duty as a cost. Use the IRD's online stamp duty calculator or consult a solicitor to confirm the exact amount. The duty must be paid within 30 days, and late payment incurs penalties. Understanding these categories helps you avoid surprises and plan your finances effectively.
For further reading, see our articles on new developments vs secondhand, understanding leasehold and freehold, reading a sales brochure, gross vs saleable area, and understanding floor plans.
Related articles
- The Complete Guide to Buying Property in Hong Kong
- How the Hong Kong Property Market Works
- New Developments vs Secondhand: Which Is Right for You?
- Market Trends and Cycles: Timing Your Purchase
- Deciphering Price Lists: What the Numbers Really Mean
- Gross vs Saleable Area: Understanding the Difference