Buying a property in Hong Kong is a structured process that typically takes 30 to 60 days from offer to completion. The steps are governed by the Estate Agents Practice (General Duties and Responsibilities) Regulation and the conveyancing procedures used by most law firms. This article outlines each stage in the order most buyers will encounter them, with specific costs, document names, and timelines based on standard market practice as of 2025.
The process applies to both new developments and second-hand properties, though the exact sequence differs slightly for pre-sale flats (uncompleted units) and resale flats. For a broader overview of the market, see How the Hong Kong Property Market Works.
Step 1: Budgeting and Financial Preparation
Before viewing any property, you must establish your budget. This involves calculating your maximum loan amount, your available deposit, and the total transaction costs.
Mortgage Loan Amount
Hong Kong banks typically lend up to 60% of the property value for residential properties under the Hong Kong Monetary Authority (HKMA) macroprudential measures, known as the loan-to-value (LTV) ratio. For first-time buyers with a property valued at HK$10 million or less, the LTV can be up to 90% for the first HK$9 million, subject to a maximum loan of HK$8.1 million. For properties above HK$10 million, the LTV cap is 50%.
The actual loan amount also depends on your debt-to-income ratio. Banks apply a stress test: your monthly mortgage payment must not exceed 50% of your income at the current interest rate, and 60% of your income if the interest rate rises by 2 percentage points. Read more in Stress Testing Explained.
Deposit and Down Payment
The deposit for a second-hand property is typically 10% of the purchase price, paid when you sign the provisional agreement for sale and purchase. For new developments, the deposit structure can vary; some developers ask for 5% initially, then another 5% later. You will also need to pay the final down payment (the balance after deducting the mortgage loan) at completion. This can be 20% to 50% of the price, depending on the LTV ratio.
Transaction Costs
Budget an additional 5% to 10% of the purchase price for transaction costs. These include:
- Stamp duty: See Stamp Duty Categories Explained for rates for Hong Kong residents, non-residents, and companies.
- Legal fees: HK$7,000 to HK$15,000 for a standard conveyancing matter, plus disbursements.
- Estate agent commission: Usually 1% of the purchase price, paid by the buyer.
- Mortgage arrangement fee: 0.5% to 1% of the loan amount.
- Valuation fee: HK$2,000 to HK$4,000.
For a full breakdown, see Transaction Costs Overview.
Step 2: Mortgage Pre-Approval
Obtaining a mortgage pre-approval is not mandatory but is strongly recommended. It gives you a firm written commitment from a bank on the loan amount, interest rate, and repayment period, valid for 60 to 90 days. This step helps you set a realistic price ceiling and signals to sellers that you are a serious buyer.
To get pre-approval, you need to submit to a bank:
- Hong Kong identity card or passport
- Proof of income: latest 3 months of payslips, tax return (tax assessment notice), and bank statements
- Employment contract or employer letter
- Credit report from the Hong Kong Credit Reference Agency (CRA)
Banks compare your income against the stress test. If you are self-employed, you may need 12 months of bank statements and a certified profit and loss statement. For a full list of required documents, see Pre-Approval and Documentation.
Interest rates vary. Most Hong Kong mortgages are linked to the Hong Kong Interbank Offered Rate (HIBOR) or the bank's prime rate (P). As of early 2025, HIBOR-based mortgages offer rates around 4.5% per annum, while prime-based rates are around 5.25%. See Interest Rate Types and Comparisons for details.
Step 3: Property Viewing and Selection
Once your finances are clear, you can start viewing properties. Work with a licensed estate agent registered with the Estate Agents Authority (EAA). The agent should show you a property's land search records, which include ownership history, mortgage encumbrances, and any government orders.
When viewing, pay attention to the gross vs saleable area as stated in the sale brochure. Hong Kong developers and agents often quote the saleable area, which excludes common areas like staircases and lift lobbies. For second-hand properties, the saleable area is listed on the land registry. Always check the floor plan to understand the layout and dimensions.
If you are considering a new development, the sales brochure contains mandatory information under the Residential Properties (First-Hand Sales) Ordinance, including the price list, floor plans, and the date of completion. The price list shows the list price and any discounts or rebates offered by the developer.
For second-hand properties, you can also check the Centaline Property or Midland Realty websites for recent transaction records to gauge market value. See Market Trends and Cycles for context on current price movements.
Step 4: Making an Offer and Negotiating
When you find a property you want to buy, you make an offer through your agent. The offer is not legally binding until you sign a written document. In Hong Kong, the standard process for second-hand properties is:
- Verbal offer: Your agent conveys your offer to the seller's agent. The seller may accept, reject, or counter-offer.
- Signing of the Provisional Agreement for Sale and Purchase (PASP): Once the price is agreed, both parties sign a provisional agreement. You pay a deposit (usually 3% to 5% of the price) to the estate agent as stakeholder. This deposit is held by the agent until the formal agreement is signed.
- Formal Agreement for Sale and Purchase (ASP): Within 5 to 14 days, your solicitor and the seller's solicitor exchange the formal ASP. At this point, you pay an additional deposit (top-up) to bring the total deposit to 10% of the purchase price.
For new developments, you usually sign a sales memorandum directly with the developer and pay a deposit of 5% to 10%. The developer may offer a deferred payment scheme where you pay a smaller initial deposit and the balance later.
Your solicitor will also conduct a title search to ensure the seller has good legal title to the property. This includes checking the land registry records for any charges, caveats, or orders.
Step 5: Signing the Formal Agreement and Paying Stamp Duty
After the provisional agreement, you have a period (typically 14 days) to sign the formal agreement. Your solicitor will prepare the deed and arrange for stamping.
Stamp duty is payable on the formal agreement. The rates as of 2025 are:
- Ad valorem stamp duty (AVD): 1.5% for properties up to HK$3,000,000; 2.25% for HK$3,000,001 to HK$4,500,000; 3% for HK$4,500,001 to HK$6,000,000; 3.75% for HK$6,000,001 to HK$9,000,000; 4.25% for HK$9,000,001 to HK$12,000,000; 4.25% for HK$12,000,001 to HK$20,000,000; and 4.25% for above HK$20,000,000.
- Special stamp duty (SSD): 10% to 20% if you resell within 36 months.
- Buyer's stamp duty (BSD): 7.5% for non-permanent residents and companies.
Stamp duty must be paid within 30 days of signing the formal agreement. Your solicitor will handle the payment and obtain the stamped document.
For more details, see Stamp Duty Categories Explained and Tax Considerations for Foreign Buyers.
Step 6: Mortgage Loan Application and Approval
After signing the formal agreement, you have about 30 to 45 days to finalize your mortgage loan. If you already have a pre-approval, the process is faster. You need to submit the formal agreement and the stamped document to the bank.
The bank will arrange a property valuation. If the valuation is lower than the purchase price, the bank will lend based on the lower amount, meaning you need to provide a larger down payment. For example, if the purchase price is HK$10 million but the valuation is HK$9.5 million, and the LTV is 60%, the bank will lend HK$5.7 million (60% of HK$9.5 million), not HK$6 million.
Once the bank approves the loan, you sign the mortgage deed (legal charge). The bank will then arrange for the loan funds to be disbursed on the completion date.
For a comparison of HIBOR and prime rate mortgages, see Interest Rate Types and Comparisons.
Step 7: Completion (Assignment and Handover)
Completion is the final step where the property is legally transferred to you. The date is specified in the formal agreement, typically 30 to 60 days after signing. On the completion date:
- Your solicitor pays the balance of the purchase price to the seller's solicitor.
- The seller's solicitor hands over the keys and the executed assignment (the deed of transfer).
- Your solicitor registers the assignment at the Land Registry.
- The mortgage is registered as a charge on the property.
After completion, you will need to pay management fees and other recurring costs such as government rates (5% of the rateable value, paid quarterly) and property tax (15% of the net assessable value, if you rent it out).
For second-hand properties, you also need to pay the outstanding management fees and utilities bills up to the completion date. Your solicitor will arrange a final statement of accounts.
Special Considerations for Different Property Types
New Developments (First-hand Sales)
The process for buying a new development is slightly different. You usually register interest, then attend a balloting session to select a flat. You sign a sales memorandum and pay a deposit (5% to 10%). The formal agreement is prepared by the developer's solicitors. Completion is often 12 to 18 months after signing, depending on the construction stage. During this period, you make progress payments as the construction proceeds. See New Developments vs Second-hand for a comparison.
Leasehold vs Freehold
Most residential properties in Hong Kong are leasehold, with a term of 50 years (for new grants) or the remaining term of the original lease. When you buy a leasehold property, you are buying the leasehold interest, not the land itself. Freehold properties are extremely rare and typically only exist in a few historic sites. See Understanding Leasehold and Freehold for details.