Enquiry Hotline: 6419-9999 (Henry Chung)

Below we have some helpful information on buying real estate in Hong Kong and what the process involves. Our legal team can guide you through the whole process very simply so you that you do not unwittingly fall into any traps due to a lack of understanding.

No restrictions on foreign ownership. But with more Stamp Duty  on Residential Properties!

There are NO restrictions. Foreigners are permitted to own any land or properties in Hong Kong without any restrictions. However, non-permanent residents buying residential properties in Hong Kong have to pay a very high stamp duty to the tax authority thus making it uneconomical to buy. Foreigners are more desirable to invest in non-residential properties such as shops, offices and industrial buildings.

Owned by a person, joint names or by a limited company

The nature of ownership is not freehold but rather a long leasehold. For example, land situate in the New Territories has a lease term up until year 2047. In Hong Kong, you have the option to buy as an individual (including joint names with your spouse) or through a corporation. For large projects, its best to own property through a Hong Kong corporation. Using limited companies to hold properties have to pay more stamp duty.

Step One: Confirm the title

People usually find a property through an estate agent. On finishing negotiation, the estate agent will arrange you to pay an initial deposit (which is usually up to 4% of the purchase price) and to sign a provisional agreement for sale and purchase with the seller. A provisional agreement for sale and purchase consists of pre-printed standard terms widely adopted in the property market.

Before the signing, the first thing you need to do is confirm the legal owner of the property. This is done by making a title search at the Land Registry which is a Government department deposited with all property instruments on land. Either the estate agent or your lawyer may do that on your behalf.

Step Two: Checking the Title

Hong Kong does not practise title registration. Owner's title is not proved by a title certificate. To ascertain the title, you need a conveyancing lawyer to investigate the title by perusing all instruments relating to the property you intend to purchase. Title investigation is usually done by your lawyer after the signing of the formal agreement for sale and purchase.

Step Three: Signing of Formal Agreement for Sale and Purchase

After you have signed the provisional agreement for sale and purchase, the estate agent will help you to pass its copy to your lawyer. Your lawyer will then contact the seller's lawyer. They will negotiate and agree on the terms of the formal agreement for sale and purchase. After agreement, your lawyer will arrange you to sign it and at the same time arrange you to pay the balance of deposit. By this stage, you will have paid a sum equal to 10% of the property price.

Step Four: Registration of the Formal Agreement for Sale and Purchase

Your lawyer will cause the registration of the formal agreement for sale and purchase at the Land Registry to protect your interest in the property.

Your lawyer will eventually receive the title instruments from the seller's lawyer. He will check the title and give advice you on its title aspect. He may do updated search at the Land Registry if necessary and raise title questions to the seller's lawyer to answer.

Getting clean title to property can be a problem and therefore you need an experienced conveyancing lawyer.

Our Conveyancing Team

Our conveyancing legal team stands ready to assist you in completing the title acquisition of the property you intend to purchase. We have extensive experience and skill sets on dealing with purchase of houses, apartments, commercial properties such as offices and factories.

Step Five: Deed Execution: Assignment for Transfer of Title

Once you are satisfied that the title is in order you will sign an assignment with the seller with the arrangement by your lawyer. An assignment is a deed which helps to transfer the property's title to you. You arrange for payment by arranging financing.

Step Six: Transfer the Funds

Purchase price is paid by cheques drawn at your lawyer's bank account. Your lawyer will arrange with you to make sure that your money is available in their account to pay for you by their cheques. The safest thing is pay your lawyer the money several days before the completion date to enable clearance of the fund. This is extremely important in Hong Kong because non-payment before the agreed completion time on the completion date will mean your breach of the agreement. Breach will result in loss of the deposit and a seller's claim for other losses. When your lawyer has paid the purchase price for you in full to the seller, the seller will send the keys of the property to your lawyer to enable you to take possession of it.

Step Seven: Register the Assignment at the Land Registry

Your lawyer will do this for you in order to protect your interest in the property. Once the registration process is completed, your lawyers will give you the registered deeds and the property will be yours. In case your purchase is financed by a bank's mortgage, the registered deeds will be passed to the bank for their custody as a lending security.

Transaction Costs: Commission and Legal Cost

Real estate agent commissions typically 1% of the price and are paid by the seller and the buyer each. The legal fee to your lawyer is by agreement. There is no standard fee.  Agree the fee with your lawyer before you appoint them to deal with the conveyance. The buyer must pay the expenses registering the new deeds. The amount is fixed by the Government. For example, it is $500 to register a mortgage deed. The same fee amount applies to an assignment.

Government Tax: Stamp Duty

You have to pay the Government stamp duty on the transaction. Please note that foreign buyers have to pay additional stamp duty. If you let a property to a tenant, you have to pay the property tax on the rental income. However, there is no capital tax in Hong Kong.

Financing

It is easy to get a mortgage in Hong Kong if you have an income. Local financing is widely available for foreign residents. Many banks in Hong Kong are extremely active in the mortgage loan markets. They offer terms to home buyers with competitive rates. The loan term can be as long as up to 25 years.

Our Conveyancing Team

Our conveyancing legal team stands ready to assist you in completing the title acquisition of the property you intend to purchase. We have extensive experience and skill sets on dealing with purchase of houses, apartments, commercial properties such as offices and factories.

Choosing the right real estate agent is an important decision which can dramatically impact your selling or purchasing experience. The following is a partial list of factors you should consider in selecting the right real estate broker.

Selling

Commission - in general, a broker would not charge more than 1% of the sales price.

Comparable Sales - ask the agent to provide you with a list of other properties with similar characteristics which recently sold in your area.

Familiarity with your Neighborhood - make sure you choose an agent who is very knowledgeable about your specific neighborhood.

Exclusivity of Agency - unless your property is extremely valuable and the estate agent is prepared to allocate certain advertising cost for its sale, Sole agency is undesirbale.

Advertising - Find out where and how often the property will be advertised. If you list the property in the newspaper, other publications and the real estate agent's website.

Open Houses - Find out if the real estate agent will be scheduling open houses. Although these open houses are usually not the most effective marketing tool, they can help sell your home.

Preparing Your Property for Sale - Does the realtor have good suggestions about how to make your property more appealing to potential purchasers?

Purchasing

Find a real estate agent who listens to you and understands your priorities.

Find an agent who is free when you need them.

Choose an agent who points out the negatives, as well as the positives, of each property. There are many possible problems with a flat, the property or location which may not be obvious to a potential buyer. Make sure your agent informs you of these negatives.

If you are looking in different towns, consider using more than one agent. The agent you are thrilled with in one town may not be as knowledgeable about properties in other towns.

Find an agent who keeps you informed of new listings. Once your agent understands what you are looking for in a home, he/she should contact you as soon as new listings come on the market. Make sure your real estate agent has you in mind when new listings hit the market so that you do not miss these opportunities.

A HONG KONG BASED LAW FIRM
FULL-SERVICE LAWYERS ON HONG KONG LEGAL SERVICE
LAW FIRM LOCATIONS: 6 LAW OFFICES IN HONG KONG
LIST OF HONG KONG LAWYERS & PRC LAWYER
LOW COST & SPEEDY HONG KONG LEGAL SERVICES

HONG KONG LEGAL SERVICES

PERSONAL INJURIES: EMPLOYEES' COMPENSATION CLAIMS, EMPLOYERS' NEGLIGENCE & TRAFFIC ACCIDENTS CLAIMS
WHAT TO DO ON HAVING INJURIES IN AN ACCIDENT?
CAR ACCIDENT CLAIMS: PERSONAL INJURIES AND PROPERTY LOSS
EXAMPLES OF INJURIES WHICH CAN BE SERIOUS
REAL PROPERTIES: SALE, PURCHASE AND MORTGAGES OF SECOND-HAND PROPERTIES
IVA (INDIVIDUAL VOLUNTARY ARRANGEMENT) PERSONAL DEBTS RESTRUCTURING, DEBT RELIEF PLAN (DRP)
MARRIAGE SOLEMNIZATION BY CIVIL CELEBRANTS: MARRY AT OUR OFFICES FOR $1900
PERSONAL BANKRUPTCY $14500 (COURT FEE AND OFFICIAL RECEIVER'S DEPOSIT INCLUDED)
CHINA LAWYER PROVIDES CHINA LEGAL SERVICE IN HONG KONG