The Hong Kong Government has been actively promoting housing policies to facilitate home ownership for residents. If you're planning to purchase property in Hong Kong, it is essential to consider not only the property prices but also to understand various government taxes and fees, mortgage expenses, legal fees, property management costs, and utility charges. By thoroughly planning for these expenses, you will be better equipped to make informed decisions and enjoy a fulfilling life in Hong Kong.
Whether you are engaging in a first-hand or second-hand property transaction, both buyer and seller are required to pay stamp duty within 30 days of signing the property sale agreement. Stamp duty is determined based on the property's selling price or market value (whichever is higher), with rates ranging from a fixed amount of HK$100 to a maximum of 4.25%.
In addition to stamp duty, mortgage-related fees and legal fees are also essential expenses for individuals applying for mortgage loans. When applying, you typically need to pay a mortgage application fee and valuation fee, so it's advisable to compare different banks' mortgage plans before making a decision. Moreover, if the mortgage ratio exceeds 70%, an application fee for mortgage insurance will be incurred. Legal fees involve the legal procedures for handling sale agreements, property searches, and mortgage documents, with specific costs dependent on the price of the property being purchased.
The government levies Rates and Government rent/premium on properties. Rates are charged based on the property’s assessed rental value, which is calculated at a specified percentage. The assessed rental value refers to the estimated annual market rental income the property could generate on the designated valuation date. This value is comprehensively reassessed and updated each year to ensure a fair distribution of the overall rates liability based on current market conditions. Currently, for all non-residential properties and residential properties with an assessed rental value of HK$550,000 or below, the rates are set at 5%. If the rental value exceeds HK$550,000, a progressive rates system applies; for further details, please refer to the Rating and Valuation Department's "Progressive Rating System for Domestic Tenements".
Government rent/premium is charged according to the lease terms applicable during the lease period of new government leases or the renewal period of leases without renewal options. This fee is calculated annually at 3% of the property’s assessed rental value and adjusts according to any changes in that value.
Both Rates and Government Rent are prepaid quarterly to the Rating and Valuation Department, which provides a "Rates and Government Rent Calculator" to help you estimate the fees payable for your property.
Additionally, the government offers various convenient payment methods, including electronic payments, auto-transfers, the Faster Payment System, and in-person payments at convenience stores and post offices, to save you time and help you avoid missed payments.
Both rates and government rent are prepaid quarterly to the Rating and Valuation Department, which provides a "Rates and Government Rent Calculator" to help you estimate the fees payable for your property.
Additionally, the government offers various convenient payment options, including electronic payments, direct debits, Faster Payment System (FPS), or in-person payments at convenience stores and post offices, among others, helping you save time and avoid missed payments.
In addition to the taxes and related fees mentioned, you may need to purchase additional insurance for your property. If you are applying for a mortgage, banks generally require homeowners to purchase building structure insurance (commonly known as fire insurance) as a condition for mortgage approval. Fire insurance primarily protects the property structure from damage caused by fire, natural disasters, or other accidents, covering the costs of repair and reconstruction. The premium is typically calculated based on the mortgage amount multiplied by a fixed percentage. However, homeowners are not obligated to purchase insurance from the mortgage bank and can choose their own providers. Besides fire insurance, you might also consider additional options, such as Home Insurance to protect furniture, appliances, and personal belongings from theft or accidental loss, or Third-party liability insurance covering claims arising from property-related accidents.
Regarding utility expenses, you will need to regularly pay the following charges:
To facilitate payments, you can choose from various methods, including mobile and electronic payments, bank ATM transfers, cash payments at convenience stores, cash or check payments at designated post offices, or auto-transfer options. These methods are not only quick and convenient but also help you avoid late payments.
Property management fees are regular charges paid to property management companies for the daily operation, maintenance, security, and management of property facilities. The amount of these fees depends on the type, size, and location of the property and generally includes services such as security, cleaning, landscaping, parking management, and emergency repairs. Some private properties may also charge additional facility fees for amenities like swimming pools or gyms.
By thoroughly understanding the responsibilities, expenses, and related policies of homeownership, you can enjoy a safe, comfortable, and personalised living experience in Hong Kong.
The information provided is for reference only and is subject to periodic updates. For the latest information, please visit the relevant website.