FS Paul Chan announced that the government is stopping all the extra stamp duties in his budget speech at LegCo. The extra stamp duties, as known as “spicy” measures, include Special Stamp Duty(SSD), Buyer’s Stamp Duty(BSD) and New Residential Stamp Duty(NRSD).

2010: The first time of extra stamp tax

The first time that Hong Kong government introduced “spicy” was in November, 2010. The price on property went took of after recovering from the financial crisis, so the SSD was introduced. It asks the person who resale the property within the first 2 years of purchase to pay up to 15% of the selling price.

2012: Increase of SSD and Introduce of BSD

Although the SSD was introduced to reduce short-term speculation on property, it resulted in a reduction in the number of properties on the second-hand market. This led to another rise in property prices. Therefore, two years later, in October 2012, the government increased the rate of SSD to a maximum of 20% and a minimum of 10%. The resale time limit was also increased to 3 years.. At the same time, the government also introduced BSD, a 15% tax if the buyer is not a Hong Kong permanent resident(HKPR).

SSD after October 2012

 2013：the Introduce of DSD

The Doubled Ad Valorem Stamp Duty (DSD) was introduced in February 2013, shortly after the introduction of the BSD and an increase in SSD. The AVD was doubled(which is also where the name DSD comes from), with the exception of Hong Kong Permanent Residents (HKPR) who do not own any residential property. The minimum rate of AVD was increased from HK$100 to 1.5% for prices under HK$2 million.

2016&2017: NRSD to replace DSD

In November 2016, the government replaced the DSD with a new rate of AVD. The new rate requires a 15% tax for anyone wanting to buy a second or more properties. Since the change only applied to new residential properties, it was also called the New Residential Stamp Duty (NRSD). Then, in May 2017, the 15% rate also applied to first-time buyers purchasing multiple properties at the same time.

2023: “less Spicy”

In the CF’s 2023 Policy Address, John Lee announced the halved of BSD and NRSD rate, as well as shortening the applicable period of the SSD from three years to two years. He also proposed new measures for taxing housing purchases for incoming talents.

2024:”No Spicy”

Governmnet halt all “Spicy” measures on property.

Data source: Rating and Valuation Department

feature photo: FS of Hong Kong Paul Chan delivered budget for 2024 in LegCo.    Photo by LegCo Youtube