Stamp duty is a tax imposed on certain legal documents related to property and stock transactions in Hong Kong. It commonly applies to the sale or transfer of real estate, tenancy agreements, and transfers of Hong Kong stock.
Because stamp duty can significantly affect the total cost of a transaction, it is important for buyers, sellers, landlords, tenants, and investors to understand how it works.
This guide explains:
- The legal framework governing stamp duty
- Current stamp duty rates
- Who is responsible for payment
- Key exemptions and reliefs
- How stamp duty affects property transactions
- How to properly stamp documents
Legal Framework of Stamp Duty in Hong Kong
Stamp duty in Hong Kong is governed by the Stamp Duty Ordinance (Cap. 117).
The law imposes duty on specific instruments, primarily:
- Agreements for sale and purchase of immovable property
- Conveyances on sale (property transfer documents)
- Leases of immovable property
- Transfers of Hong Kong stock
Stamp duty applies to the document itself, not merely the transaction.
If a chargeable document is not stamped, it generally cannot be admitted as evidence in court until the required duty and any penalties are paid.
Stamp duty is administered by the Stamp Office of the Inland Revenue Department.
What Are the Documents That Require Stamp Duty?
Stamp duty commonly applies to the following documents:
Property Transactions
- Agreement for sale and purchase
- Assignment or conveyance transferring ownership
Tenancy Agreements
- Rental agreements for residential or commercial property
Stock Transfers
- Contract notes for the sale and purchase of Hong Kong stock
- Instruments of transfer for stock transfers
Who Is Legally Responsible for Paying Stamp Duty?
Under the Stamp Duty Ordinance, all parties to a chargeable instrument are jointly and severally liable for stamp duty. In property transactions, these parties effectively become the property dealing duty payers, meaning any legally responsible party may be required to settle the stamp duty if it remains unpaid.
In practice, however, contracts usually allocate responsibility between the parties. For example:
- Buyers typically pay stamp duty on property purchases.
- Landlords and tenants often share duty on tenancy agreements.
- Buyers and sellers each pay duty on their respective stock contract notes.
Regardless of private arrangements, the government may pursue any liable party if the duty is unpaid.
Types of Stamp Duty on Property
Historically, Hong Kong imposed several forms of property stamp duty. As of February 28, 2024, demand‑side cooling measures were abolished.
Today, property acquisitions are generally subject only to Ad Valorem Stamp Duty (AVD).
Previously existing duties—Buyer's Stamp Duty (BSD), Special Stamp Duty (SSD), and New Residential Stamp Duty—no longer apply to transactions executed on or after that date.
Ad Valorem Stamp Duty (AVD)
Ad Valorem Stamp Duty is payable on the transfer of immovable property in Hong Kong.
The duty is calculated based on the higher of:
- the purchase price, or
- the property's market value.
Prior to 28 February 2024, Hong Kong operated two rate schedules for Ad Valorem Stamp Duty (AVD): Scale 1 and Scale 2.
Scale 1 imposed significantly higher duty rates and generally applied to certain residential property acquisitions where the purchaser did not qualify for preferential treatment under Scale 2, such as cases where the buyer was not a Hong Kong permanent resident or already owned residential property.
The higher Scale 1 rates formed part of a set of demand-side market-cooling measures introduced to curb speculative activity in the residential property market.
Following policy changes announced on 28 February 2024, these demand-side cooling measures were abolished. Previously, the applicable stamp duty rate often depended on whether the purchaser was a Hong Kong permanent resident and whether the buyer already owned residential property.
As a result, property acquisitions are now generally subject to AVD calculated under the Scale 2 rate schedule, regardless of the buyer’s residency status or number of properties owned.
Although the Scale 1 rate schedule remains set out in the Stamp Duty Ordinance (Cap. 117), it is not expected to apply to most current residential property transactions following the 2024 policy changes.
AVD Rate Structure (Scale 2)
The current rates follow the Scale 2 schedule, which applies to most property transactions.
| Property Value | Stamp Duty Rate |
|---|---|
| Up to HKD 4,000,000 | HKD 100 |
| HKD 4,000,000 – HKD 4,323,780 | HKD 100 + 20% of the amount over HKD 4,000,000 |
| HKD 4,323,780 – HKD 4,500,000 | 1.5% |
| HKD 4,500,000 – HKD 4,935,480 | HKD 67,500 + 10% of the amount over HKD 4,500,000 |
| HKD 4,935,480 – HKD 6,000,000 | 2.25% |
| HKD 6,000,000 – HKD 6,642,860 | HKD 135,000 + 10% of the amount over HKD 6,000,000 |
| HKD 6,642,860 – HKD 9,000,000 | 3% |
| HKD 9,000,000 – HKD 10,080,000 | HKD 270,000 + 10% of the amount over HKD 9,000,000 |
| HKD 10,080,000 – HKD 20,000,000 | 3.75% |
| HKD 20,000,000 – HKD 21,739,120 | HKD 750,000 + 10% of the amount over HKD 20,000,000 |
| HKD 21,739,120 and above | 4.25% |
These rates create a progressive duty structure for property transactions.
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AVD Exemptions and Relief
Certain property transfers may qualify for stamp duty relief, including:
- Transfers between associated companies under Section 45 of the Stamp Duty Ordinance
- Transfers ordered by a court
- Transfers to the Hong Kong Government
- Transfers to approved charitable institutions
- Transfers occurring through inheritance
Relief is not automatic. Supporting documents must be submitted when the instrument is presented for stamping.
Stamp Duty on Tenancy Agreements
Stamp duty applies to tenancy agreements based on the average yearly rent and the lease term.
| Lease Term | Stamp Duty Rate |
|---|---|
| 1 year or less | 0.25% of total rent |
| More than 1 year up to 3 years | 0.5% of total rent |
| More than 3 years | 1% of total rent |
Additional charges such as key money or premiums may also be subject to duty.
Extra copies of a stamped tenancy agreement attract a HKD 5 fee per copy.
Both landlord and tenant are legally responsible for ensuring that the agreement is stamped.
Stamp Duty on Hong Kong Stock
Stamp duty applies to transfers of Hong Kong stock.
For stock trades:
- 0.13% stamp duty is payable on the buyer's contract note
- 0.13% stamp duty is payable on the seller's contract note
This results in a total effective duty of 0.26% of the transaction value.
In addition:
- An HKD 5 fixed duty applies to the instrument of transfer.
For certain transfers without consideration, the duty may be assessed based on the market value of the shares.
Time Limits for Stamping
Stamp duty must be paid within statutory deadlines.
| Transaction Type | Deadline |
|---|---|
| Property sale agreement | Within 30 days after execution |
| Tenancy agreement | Within 30 days after execution |
| Stock contract note executed in Hong Kong | Within 2 days after execution |
| Stock contract note executed outside Hong Kong | Within 30 days |
Late stamping may result in financial penalties.
How to Pay Stamp Duty
Stamp duty can be paid using several methods. In certain circumstances, the Stamp Office may accept a copy or immovable property duplicate document for stamping when the original instrument cannot be readily presented, subject to the Inland Revenue Department's requirements.
1. In Person at the Stamp Office
Bring the original property document or tenancy agreement and complete a stamping request form.
2. E-Stamping
Electronic stamping allows online payment and the issuance of a stamp certificate. This applies to property transfers, tenancy agreement documents, and the transfer of Hong Kong stock.
3. Paper Application
For certain property agreements and tenancy agreement documents, stamping can be completed without presenting the original document.
A stamp certificate issued by the Inland Revenue Department is legally equivalent to a physically stamped property instrument.
Consequences of Not Stamping
If a chargeable document is not stamped:
- The document may not be admissible as evidence in court.
- Financial penalties may be imposed.
- Property registration may be delayed.
Proper stamping helps ensure that ownership rights and contractual obligations are legally recognized.
Impact of Stamp Duty on Property Transactions
Stamp duty is a significant upfront cost in Hong Kong real estate transactions.
Because duty is calculated based on the higher of the purchase price or market value, the amount payable can be substantial for high‑value properties.
Stamp duty can influence:
- Buyer affordability
- Investment decisions
- Transaction timing
- Market liquidity
Changes to stamp duty policy have historically had immediate effects on property transaction volume and market sentiment.
Final Thoughts
Stamp duty remains a key cost in Hong Kong property and stock transactions. Although market‑cooling duties were abolished in 2024, Ad Valorem Stamp Duty still applies to most property transfers.
Understanding the applicable rates, exemptions, and deadlines helps reduce compliance risks and avoid costly penalties.
For businesses, investors, and property owners seeking assistance with Hong Kong documentation and compliance, Air Corporate can provide professional administrative and corporate support.
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Author
Pallavi Srivastava
Pallavi is a Chartered Company Secretary and Chartered Governance Professional in Hong Kong who helps independent businesses and entrepreneurs cut through the red tape. She knows that when you're running your own show, dealing with statutory filings and compliance requirements can feel overwhelming—so she translates complex Hong Kong regulations into practical advice that actually makes sense for solo founders and small business owners.
