good news.

The Legislative Council of the Hong Kong Special Administrative Region Government passed the "Stamp Duty (Amendment) (No. 2) Bill 2023" on June 21, implementing the introduction of a tax refund mechanism under the Buyer's Stamp Duty and New Residential Stamp Duty systems to attract talents from all over the world to stay in Hong Kong for long-term development , to expand the talent pool in Hong Kong.

The Amendment Ordinance will be gazetted on 30 June 2023. The Inland Revenue Department will immediately accept tax refund applications from foreign talents.

policy content

Under the tax rebate mechanism, qualified foreign talents who come to Hong Kong under the Designated Imported Talents Scheme, purchase residential properties in Hong Kong on or after October 19, 2022, and become Hong Kong permanent residents thereafter, can pay for a property they have purchased. Residential properties apply for a refund of Buyer's Stamp Duty and New Residential Stamp Duty paid.

However, there is a premise that, at the time of acquisition, the property is the only residential property held by the applicant (except in the case of changing properties), and the applicant still holds the property on the date of claiming the tax refund.

Applicants are still required to pay Ad Valorem Stamp Duty calculated at Scale 2 rates (i.e. rates applicable to Hong Kong permanent residents who are first-time home buyers).

Who can apply for a tax refund?

Qualified foreigners who enter Hong Kong through any of the following schemes can apply for tax refund:

✔ "General Employment Policy"

✔"Mainland Talent Admission Scheme"

✔ "Quality Talent Admission Scheme"

✔ "Technology Talent Admission Scheme"

✔"Arrangements for Non-local Graduates to Stay/Return to Hong Kong for Employment"

✔"Plan for Importing the Second Generation of Chinese Hong Kong Permanent Residents"

✔ "High-end Talent Pass Program"

In addition, the following prerequisites must be met in order to apply for a tax refund:

a. He/she purchases a residential property in Hong Kong on or after October 19, 2022 as a qualified foreign talent;

b. At the time of purchasing the relevant property, he/she must hold a valid visa issued under the "Designated Admission of Talents Scheme" and not own any other residential property in Hong Kong (unless he/she is purchasing the relevant property as a replacement His/her original only residential property in Hong Kong, that is, buy first and then sell, and must sell the original residential property within 12 months after the date of the assignment of the relevant property);

c. He/she has become a permanent resident of Hong Kong;

d. He/she is still the owner of the property concerned when applying for the stamp duty refund; and

e. He/she can only apply for a stamp duty refund on one residential property.

Tax refund related questions and answers

Question 1

How to prove that the tax refund applicant is a qualified foreign talent?

answer

A qualified foreign talent is a non-Hong Kong permanent resident who has entered Hong Kong through the "Designated Imported Talent Scheme". Documents that can prove the status of a qualified foreign talent include (i) the label/notification of the entry visa/entry permit covering the date of purchase of the property concerned; or (ii) the label/ Notice.

Question 2

Mr. X is a qualified foreign talent and does not own any residential property in Hong Kong. He signed a provisional sale and purchase agreement on 18 October 2022 to purchase a residential property. He signed a sale and purchase agreement with the same terms as the provisional sale and purchase agreement on 31 October 2022 and paid "buyer's stamp duty" and "ad valorem stamp duty" calculated at the rate of Part 1 of Scale 1. Can he apply for a stamp duty refund after he becomes a Hong Kong permanent resident?

answer

When the same buyer and seller enter into more than one sale and purchase agreement (i.e. provisional sale and purchase agreement and sale and purchase agreement) on the same property on the same terms, the date of the first sale and purchase agreement (i.e. provisional sale and purchase agreement) should be used to determine whether a person has acquired the date of the property. In this case, Mr. X has purchased a residential property before 19 October 2022. Therefore, after he becomes a Hong Kong permanent resident, he cannot apply for a stamp duty refund.

Question 3

Mr. X is a qualified foreign talent and does not own any residential property in Hong Kong. Suppose he purchases a residential property (Property A) for $10 million on 1 November 2022. He buys another residential property (Property B) for $20 million on 1 May 2023. He becomes a Hong Kong permanent resident on 1 November 2024 and he still owns Property A and Property B. Can he apply for a stamp duty refund on property B after becoming a Hong Kong permanent resident?

answer

Can't. Mr. X can only claim stamp duty refund on his first property (i.e. Property A).

Question 4

Neither Mr. X nor Ms. Y owns any residential property in Hong Kong. Mr. X is a qualified foreign talent and Ms. Y is a Hong Kong permanent resident. They jointly purchase a residential property on 1 November 2022. Can they apply for stamp duty refund?

answer

According to the current law, if a Hong Kong permanent resident and a non-Hong Kong permanent resident jointly purchase a residential property, they are required to pay "Buyer's Stamp Duty" and "Ad Valorem Stamp Duty" at Part 1 of Scale 1. Since Ms. Y is not a qualified foreign talent, even after Mr. X becomes a Hong Kong permanent resident, Mr. X and Ms. Y cannot apply for stamp duty refund.

Question 5

The situation is similar to Question 4, but Ms. Y is a non-Hong Kong permanent resident, and Mr. X and Ms. Y are married. Can they apply for a stamp duty refund?

answer

A qualified foreign talent and another close relative who is not a permanent resident of Hong Kong jointly purchase a residential property in Hong Kong, regardless of whether the close relative is a qualified foreign talent, only if they meet all the tax refund prerequisites for the qualified foreign talent ( For example: when purchasing the relevant property, they do not own any residential property in Hong Kong, and they have become permanent residents of Hong Kong), the qualified foreign talent can apply for stamp duty refund. In this case, Mr. X and Ms. Y can apply for a refund of stamp duty when they both became Hong Kong permanent residents while still holding the jointly owned residential property.

Question 6

Similar to question 4, but Mr. X and Ms. Y are married. Can they apply for stamp duty refund?

answer

According to the current law, if a Hong Kong permanent resident and his non-Hong Kong permanent resident close relatives jointly purchase a residential property, they are not required to pay "Buyer's Stamp Duty". If they do not own any other residential property in Hong Kong at the time of purchasing the residential property, they are only required to pay "Ad Valorem Stamp Duty" at Scale 2 rates. A close relative is a parent, spouse, child, brother or sister. If more than two persons, they are closely related only if each of them is a parent, spouse, child, brother or sister of each of the others. In this case, Mr. X and Ms. Y are close relatives. Therefore, they are no longer required to pay "Buyer's Stamp Duty" and "Ad Valorem Stamp Duty" calculated at the rate of Part 1 of Scale 1 when they purchased the relevant residential property.

Question 7

The situation is similar to question 4, but both Mr. X and Ms. Y are qualified foreign talents. Can they apply for stamp duty refund?

answer

Only when they meet all the tax refund prerequisites for qualified foreigners can they apply for a stamp duty refund.

question 8

When can a Hong Kong permanent resident (formerly a qualified foreign talent) apply for a tax refund from the Inland Revenue Department?

answer

Please note that the proposed refund of stamp duty must be implemented through amendments to the Stamp Duty Ordinance. The Government will introduce relevant amendment bills to the Legislative Council in due course. Details of the amendments may change during the legislative process. The Stamp Office will only accept applications after the new legislation establishing the new stamp duty refund mechanism has been gazetted.

As the financial center of Asia and an international metropolis, Hong Kong attracts a large number of outstanding talents with its comprehensive legal system, policy environment, financial market and low tax rate.

If you are interested in Hong Kong's "Talent Importation Program" or have any questions, please contact Xingyunhai International!