How foreigners can buy real estate in Hong Kong: rights and opportunities

The real estate sector in Hong Kong presents a unique arena for foreign investors, but with certain nuances. It is important to consider that the rights and obligations of foreign owners have their own specifics that require careful analysis.

Features of the local real estate market

When foreign investors search for real estate, it is important to pay attention to the characteristics of the local market. Since 1997, all land in Hong Kong has been owned by the People's Republic of China. This means that the responsibility for managing this land lies with the government authorities. As a result, even when purchasing property, you do not actually become its full owner — instead, you simply obtain the right to lease the land, and the lease term can vary from 50 to 999 years. The duration of the lease significantly affects the market value of the property: the longer the term, the higher the price that can be asked for it.

Who can purchase real estate?

Which foreign citizens can purchase real estate in Hong Kong? It is worth noting that certain groups, such as citizens of Afghanistan, Albania, Cuba, North Korea, and mainland China, are not allowed to buy property. However, citizens of the following countries can become property owners in this region without any particular difficulties:

• Russia
• Ukraine
• Kazakhstan

Rights and responsibilities of owners

Regarding the rights that a foreigner receives after completing a transaction, it should be emphasized that the right to a simplified visa as an owner is not automatically granted. For example, owning property does not give you an advantage in obtaining a multiple-entry visa, which is an important aspect to consider when planning a trip to Hong Kong. Additionally, compliance with local laws regarding safety and other regulations remains relevant even with the presence of real estate.

The responsibilities imposed on owners are the same regardless of their citizenship. Every owner must:

• Paying utility bills
• It should be noted that failure to fulfill these obligations may result in fines from local authorities.

However, it is worth noting that there is no annual property tax in Hong Kong, which is an attractive factor for investors.

Tax obligations of residents

Nevertheless, residents of Russia who live in Hong Kong for more than 183 days a year must comply with tax legislation by notifying tax authorities about their foreign bank accounts and other financial activities. This aspect can become important when entering the real estate market abroad.

Conclusion

Ultimately, potential investors should keep in mind that all land in Hong Kong is leased. Therefore, the process of realizing a property requires:

• Preliminary study of the documentation
• Compliance with all legal aspects

It is recommended to consult local specialists to avoid unexpected issues during the purchasing process. This approach significantly simplifies the process and makes it more manageable.

Searching for real estate in Hong Kong can be a real challenge, especially if you don't plan to involve professionals like realtors or lawyers. However, despite not being required to have a specialist, the assistance of qualified experts can significantly simplify the entire process, as verifying the authenticity of documents is quite a complex task. So how can you effectively organize your search for housing in this unique metropolis?

The lack of Russian-speaking agencies

There is a clear shortage of Russian-speaking agencies in the real estate market that could assist in purchasing property in Hong Kong. The most convenient solution would be to use English-language websites and platforms of international agencies, where numerous listings are published. However, if you are not confident in your English skills, you may need to hire a translator, which will increase the overall costs of the transaction.

Start of the search

Try starting with specialized portals that focus on the real estate market in Hong Kong. There, you can filter listings based on your important criteria, save interesting options, and subscribe to notifications about changes. Alternatively, you can leave a request for housing selection, and then realtors will find suitable properties for you that meet your requirements.

Market research

Before making a purchase, it is important to carefully familiarize yourself with the current trends in the Hong Kong real estate market by studying the latest trends and materials on the subject. The realtor you choose will act as your representative at all stages of the process:

• He will help select suitable properties.
• organizes a trip for property viewing;
• will negotiate with the seller on your behalf.

Licensing of agencies

It is important to note that the activities of real estate companies in Hong Kong are regulated by special licenses. When choosing an agency, be sure to check for the presence of a license and the credentials of the specific realtor.estate agent cardIf you are dissatisfied with the agency's work, you have the option to file a complaint by calling the hotline numbers:2117 8600or2111 2777.

Stages of the deal

The transaction process can be divided into several main stages. The first step is the selection and thorough examination of the property. Once the buyer has a specific option, their lawyer takes the necessary measures. They review the ownership information provided by the seller's lawyer, as well as the accompanying documentation, and conduct checks in the land registry for any possible encumbrances. If doubts arise at this stage, the buyer can withdraw from the transaction.

Important points before closing the deal

Experts recommend paying attention to several important points before signing a deal. For example:

• It is necessary to determine whether a specific permit is required from government authorities.
• It is also important to establish whether all property taxes were paid by the previous owner on time.
• Moreover, it is worth conducting an inspection for unauthorized renovations.
• Find out if the property was previously under a mortgage lien, and if so, whether the loan has been paid off.

Consultations with specialists

The next step in the transaction process involves a more detailed examination of the legal aspects and the completion of necessary legal procedures.

Introduction

A temporary agreement for the purchase of real estate is usually presented as a convenient and concise document, which is most often prepared by a real estate agent. It is important that this document includes the signatures of all parties involved in the transaction: the seller, the buyer, and the agency representative.

A temporary agreement usually consists of a number of significant elements:

• Identification of partiesinvolved in the deal;
• Property characteristicswhich is offered for sale;
• Indication of the priceset by the seller;
• Deposit termsand payment terms;
• Date of conclusionofficial agreement;
• Information about the possibility of rentingreal estate in the future;
• Date of transaction completion;
• Clarification, which side?will be responsible for paying the stamp duty and other expenses related to the transaction process;
• Commission size, which a real estate agent receives;
• Responsibility of the participantsfor violating the terms of the agreement;
• Special conditionsif they are provided for.

Stages of the agreement

During the signing of a temporary agreement, the buyer usually makes an advance payment, which then confirms their interest in the property. Most often, the amount of this advance is around 10% of the total cost of the property. In the process of finalizing the deal, 3-5% of the amount may be transferred immediately after signing the temporary agreement, while the remaining 5-7% should be transferred within two weeks.

Preparation of the official agreement

The next step is to create an official purchase and sale agreement. This document includes more detailed information about the transaction and is based on the previously signed temporary agreement. It is usually drafted by a lawyer on behalf of the seller, who will later coordinate it with the buyer's attorney. The signing of this contract occurs only after both parties have received consultations on all aspects of the deal.

The role of lawyers

It is important for both parties to have their own lawyers; however, in some cases, such as when the parties are relatives or the transaction value is below 1 million Hong Kong dollars, their presence may not be necessary. Such cases can also arise when purchasing property that is still under construction.

Signing process

After the draft of the official agreement is prepared, the seller's lawyer sends it to the buyer's lawyer for review. Once all the terms are agreed upon, the seller's lawyer creates the final version of the document for signing and sends two copies to the buyer's lawyer.

After the buyer's lawyer signs the agreement and its duplicate, these documents, along with the deposit, are handed over to the seller's trusted representative. Then, the seller's lawyer arranges for the agreement to be signed by the seller. The original signed document is given to the buyer's trusted representative, while the duplicate remains with the seller's lawyer.

Transaction registration

Immediately after signing the official agreement, the buyer's lawyer submits it to the office responsible for paying the stamp duty to obtain the appropriate stamp. After receiving this stamp, the document is sent to the land registry for the transaction to be registered.

Completion of the process

The final stage of the entire process is the full payment for the property. At the moment of signing the official purchase agreement, the buyer pays the stamp duty and makes the remaining payment for the property. All financial transactions are carried out through banking institutions to ensure the reliability and legality of the operations conducted.

Today, closing a real estate deal remotely has become quite a normal occurrence. For this, a potential buyer only needs to provide a power of attorney to an experienced lawyer, who will handle all the processes necessary to complete the transaction.

Additional costs when purchasing real estate in Hong Kong

When purchasing real estate in Hong Kong, it is important to consider additional costs, among which a significant one is the tax known as stamp duty. This tax places a burden on the buyer, imposing full financial responsibility for its payment.

Stamp duty for buyers (BSD)

The stamp duty for buyers, calledbuyer stamp dutyThe BSD was introduced in 2012 to regulate the real estate market and prevent the formation of a speculative "bubble." A rate has been set for non-residents and foreign companies at15%from the cost of the purchased item.

Stamp duty on real estate sales (AVD)

Stamp duty on real estate sales, orad valorem stamp dutyThe AVD started operating in 2013 and is applied both in sales and in the transfer of rights to an object. The government provides exceptions for certain cases, but their number is limited.

Stamp duty rates in Hong Kong

The rates of the stamp duty vary depending on the value of the property. For example:

• If the price of the item does not exceed2 million Hong Kong dollarsThis is approximately257,732 US dollars), the rate will be1.5%.
• For objects in the price range from2 to 3 million Hong Kong dollarsthe rate will increase to3%.
• If the apartment costs from3 to 4 millionThe rate will be4.5%.
• At a price range of4 to 6 million–6%.
• At a price of the objects starting from6 to 20 millionthe rate will reach7.5%.
• For real estate with a value exceeding20 millionThe rate will be8.5%.

Special stamp duty (SSD)

C2010 yearIn Hong Kong, a special stamp duty (SSD) has also been introduced for the sale of residential properties. This tax is levied if the property is resold within24 or 36 monthsAfter his initial purchase, the rate of this fee depends on the time intervals between the acquired and sold property. If the transaction is carried out in a shorter period, it is necessary to agree in advance on which party will bear the costs of paying the fee, which is recorded in the signed contract.

Total costs of purchasing real estate

The total costs of purchasing real estate in Hong Kong have many components. It is necessary to consider the following types of expenses and their corresponding rates:

• The stamp duty on real estate sales (AVD) ranges from1.5% to 8.5%and is paid for by the buyer;
• The special stamp duty (SSD) ranges from5% to 20%and also falls on the shoulders of the buyer;
• The stamp duty for buyers (BSD) is fixed.15%and once again it falls on the buyer;
• The services of a lawyer can cost anywhere from0.075% to 0.125%and these costs are also borne by the buyer;
• The commission of the real estateagency is from0.5% to 1%, and these expenses are also attributed to the buyer or the seller.

Thus, the total cost of acquiring real estate in Hong Kong can range from22.08% to 44.63%for the buyer, while the seller's expenses usually amount to about0.5% - 1%.

Example of expense calculation

To provide a clearer understanding of the additional costs when purchasing, let's consider an example with luxury apartments covering an area of360 square metersThis will help better assess all the associated financial obligations when purchasing real estate in this region.

Conclusion

After a thorough analysis of all the features of the real estate market in Hong Kong, I am confident that the process of acquiring property here, despite the complex legal and economic context, can be profitable and promising. Hong Kong, with its unique location and rapidly developing economy, offers foreign investors numerous opportunities.

I understand that the key aspects for a successful deal are:

• thorough analysis of legal aspects;
• obligations;
• local market;
• the choice of reliable professionals — agencies and lawyers.

These moments will help avoid potential pitfalls. When buying property in Hong Kong, I not only gain the right to lease the land but also the opportunity to become part of a unique cultural and business environment. At the same time, I must not forget about my responsibilities, such astimely payment of utility billsAll of this requires a responsible approach and careful planning to avoid fines and other troubles.

For my future steps, I intend to use the available resources and tools, such as:

• specialized online platforms;
• consultations with professional realtors.

This will help me in searching for and selecting the right property. It's important not to forget about the possibilities.remote acquisition of real estate...which makes the process even more convenient and faster.

Based on all the points mentioned above, I am confident that by following the right recommendations and preparing in detail for each stage, I will be able to successfully complete the real estate purchase in Hong Kong. This is not just an investment of funds, but also a step towards new opportunities and prospects.