Jan. 2013 - Publication of stamp duty (amendment) bill 2012

The Bill will be introduced into the Legislative Council (“LegCo”) on 9 January 2013.  Upon enactment of the Bill, any residential property acquired by any person (including a company incorporated) except a Hong Kong Permanent Resident (“HKPR”) will be subject to the BSD. BSD is to be charged at a flat rate of 15% on all residential properties, on top of the existing stamp duty and the SSD, if applicable.  Furthermore, any residential property acquired on or after 27 October 2012, either by an individual or a company (regardless of where it is incorporated), and resold within 36 months, will be subject to the new rates of SSD.

As we have already reported the proposed measures in our November newsletter, this article only highlights the key features of the Bill concerning BSD:

Definition of HKPR 

HKPRs are holders of valid permanent identity cards or anyone being exempted from holding an identity card under the Registration of Persons Ordinance, e.g. the aged, the blind and the infirm whose exemption has been approved by the Commissioner of Registration.

Exemption from BSD

The purchaser / transferee must be a HKPR acting on his / her own behalf in the acquisition of the residential property.  An exemption can be given in the case where the HKPR is a minor or a mentally incapacitated person who, due to his incapability requires another person to act on his / her behalf to enter into the acquisition agreement in the capacity of a trustee.

Corporate buyers

Even when all the shareholders of a company that acquires a residential property on or after 27 October 2012 are HKPRs, the BSD is still applied.

Refund of BSD for redevelopment

BSD should not hinder redevelopment.  A refund mechanism will be put in place for redevelopment projects such that acquisition of residential properties for the construction of immovable properties will be exempted from the BSD, provided that the immovable properties being constructed / modified are completed within 6 years (with extension permitted if granted by the Lands Tribunal).  The 6-year period will start when the relevant developer has become the owner of the entire lot of the redevelopment concerned.  The developer will be considered as having fulfilled the “6 years” condition if it has obtained the occupation permit in respect of the redevelopment within 6 years.