If you are thinking of buying a property in Hong Kong, here are a few things to keep in mind during the search and procurement of your ideal property. In Hong Kong, the law governing real estate is called the Conveyancing and Property Ordinance (CPO). It is based on the UK system of transactions and is similarly assisted by Common Law which is case law that has been built up over the years.
Be aware that between residential and non-residential property, there is no major legal distinction aside from stamp duty purposes. All land in Hong Kong belongs to the government, and leases can be arranged for periods up to 999 years. These days, leases will usually include restrictions, obligations and other conditions such as environmental control. The only restriction to land ownership is if there is a legal disability. Foreign nationals and entities can own land, although if said entity wants to conduct business operations in Hong Kong, it will have to register itself as a company at the Companies Registry.
Stamp duty can range between 0.75 per cent and 3.75 per cent of the purchase price and is usually paid by the purchaser. With residential properties, the stamp duty is payable upon execution of the Sale and Purchase Agreement, although legal provisions have been made to allow deferment of payment until the completion of the purchase or resale with the maximum deferral period being three years.
Rates to be paid to the Government are levied on a quarterly basis and usually fall under the responsibility of the owner or occupier of the property. The rateable value of a property is based on how much rent could be achieved by that property over a period of one year. The actual rates payable, on a proportion of the rateable value defined by the government currently stands at five per cent.
