Because Hong Kong is an important business hub in Asia, many individuals relocate here to work and live. Investors who open companies in Hong Kong are also interested in the real estate market when looking for a suitable office space. The decision to purchase a property in Hong Kong is important, and foreign individuals often request the services of real estate agents.
Our lawyers in Hong Kong can assist you throughout the steps needed to buy a property in Hong Kong, ensure that all the agreements and documents are in order, and that the real estate agent is working in your best interest. We can also help you compare prices on the market and decide what option is best for you.
| Quick Facts | |
|---|---|
| Foreigners can buy property in Hong Kong (Yes/No) | Yes |
|
Types of properties in Hong Kong |
Apartments in high-rise complexes, low-rise or mid-rise ones, houses (in different sizes). |
|
Real estate agent use |
Common for all types of real estate transactions. |
| Real estate agent fees | Both the buyer and the seller pay fees when using real estate agents. |
| Land ownership |
The land is owned by the state, Government leases are awarded. |
| Deed registration |
Mandatory |
| The agency with which the property deed is registered |
The Land Registry |
| Provisional agreement use |
Yes, it is common for the parties to first sign a provisional sale/purchase agreement. |
| Use of lawyers |
Possible (and advisable in some cases); when using lawyers, they will negotiate the formal agreement. |
| Initial deposit | As per the Provisional Agreement |
| Property due diligence |
Highly advisable, to be performed before the signing of the final agreement. |
| Property purchase costs (apart from the asking price) |
Stamp duty according to the value of the property. |
| Reasons to buy property in Hong Kong |
The real estate market is well-developed and rental growth is widespread, from interest in accessible apartments to high-end properties. |
| Assistance for individuals |
Our conveyancing team can assist you if you are ready to buy an apartment or house in Hong Kong. |
| Assistance for investors/corporations | Real estate investors and corporations interested in commencing real estate investment projects in Hong Kong can rely on our assistance. |
Table of Contents
Housing options in Hong Kong
New properties are available for purchase or lease in Hong Kong, but properties leased by owners are also an option. The available options are suited for any budget and include starter homes (low-priced apartments), middle-class properties, luxury apartments, and office spaces. Some real estate agencies in Hong Kong offer special services for expatriates who plan to relocate to Hong Kong. While some may prefer to settle down in a suburban area, others might want to find a property in the middle of the city. Another important aspect when buying a property in Hong Kong is to verify if all the plumbing, wiring and other important systems are functional.
Our Hong Kong lawyers can help you with useful references about the real estate market in Hong Kong. We can also help you perform a property due diligence verification of the chosen property and help you draft any necessary documents.
Steps for purchasing a property in Hong Kong
Briefly outlined, the steps followed by a buyer who wishes to purchase real estate property in the HKSAR are the following:
- Researching the available properties according to budget, location, and other criteria depending on the desired type (commercial or residential property);
- Inspecting the premises and negotiating the price with the seller (this is also a step that can take place assisted by our Hong Kong lawyers);
- Signing the provisional agreement, outlining the details of the transaction (see below);
- Pay the initial deposit, as agreed with the seller when you first discuss to buy a property in Hong Kong;
- Negotiating the final terms of the transaction and drawing up the formal agreement (also performed with the assistance of our local attorneys);
- Reviewing the deeds of property, making the final inspections, and paying the remaining amount before the buyer receives access to his new property.
Working with a real estate agent is a suitable option for many of those who buy a property in Hong Kong, however, it is not a mandatory step. You can start your property search on your own, and enlist the services offered by our conveyancing experts once you find the desired property.
After the buyer has found the ideal property in Hong Kong, the purchase process begins with a provisional sale and purchase agreement. This initial contract has to be signed by the buyer and the seller after they have agreed on the initial terms of the purchase. Individuals should know that this agreement is legally binding.
The final sale and purchase agreement is drafted based on the provisional one and contains the more detailed terms of the purchase and any additional special conditions. The final purchase agreement cannot contradict the first signed contract between the parties.
Our Hong Kong law firm can assist you while signing these contracts. One of our lawyers will revise the agreement and make sure that the applicable terms are not detrimental to you.
We invite you to watch a video about the property purchase process:
You can discuss the options to move into the city with our lawyers specializing in immigration matters. Although there is no direct route to residency or citizenship through real estate investments, those who purchase a property in Hong Kong can often be interested in acquiring the right of abode (the right of residency), including permanent residency rights. Our team can answer your questions concerning immigration to Hong Kong, at the same time, after you have purchased real estate.
An important step with which our team is able to assist is the verification that needs to be performed with the Land Registry. As a buyer, you are entitled to receive official documents (information) about the property from Hong Kong’s official Registry, and the estate agent (when working with one) is required to provide this to you. The results of the Land Registry search on the property title are to be provided before signing the provisional agreement, so that the buyer may enter into the property transaction fully informed.
When working with a real estate agent in Hong Kong you will need to consider his or her commission. In practice, this can vary and it can be subject to negotiation.
Tax and financing issues when buying property in Hong Kong
Individuals, as well as investors, should also be informed of the main taxes that apply to residential property transfers, as well as their financing options, for those who need a loan in order to make the purchase.
Any tax law and real estate law issue can be discussed at length with our lawyers in Hong Kong, however, we recommend that you keep in mind the following aspects:
- Hong Kong is a low-tax jurisdiction and there is no value-added tax on property purchases (such as in other jurisdictions in which real estate transactions are subject to this tax);
- Stamp duty is a tax that applies however, on the agreement concluded for the property sale/purchase; the rates vary and the value on residential property is 15% (flat rate), while that for nonresidential property is 4.25% of the value of the transferred property; our lawyers can give you more details on the stamp duty that applies on immovable property transactions;
- You will need to check the following issues with the bank before you buy a property in Hong Kong: the mortgage amount you can receive, the interest rates, and the repayment terms;
- Buyers should also take into account any applicable insurance fees, as well as the legal fees, and other handling fees (as may apply).
If you are looking to buy or rent a home in the context of relocation, our immigration lawyers in Hong Kong can also answer your questions about the processes needed for your lawful move. Foreign nationals living in Hong Kong can ask us more about international mortgages, and how they can apply for a mortgage if they are residents, or plan on making an application for residency.
The information presented by the lawyers and conveyancing experts at our law firm in Hong Kong covers the general rules for property purchases in the HKSAR. Residential and nonresidential property purchases should be treated with uppermost attention to the details of the transaction, as well as the terms of the purchase and the delivery date of possession, among other issues.
Please contact our lawyers in Hong Kong if you need any legal advice on drafting and signing property sale and purchase agreements in Hong Kong.