On 28 December 2012, the Government gazetted the Stamp Duty (Amendment) Bill 2012 to (a) adjust the duty rates and extend the holding period in relation to Special Stamp Duty (SSD) and (b) introduce Buyer’s Stamp Duty (BSD) on residential properties acquired by any person or company except a Hong Kong Permanent Resident (HKPR).
Recap of key concepts
The adjusted SSD will have three levels of regressive rates for different holding periods:
The BSD will be charged at a flat rate of 15% for all residential properties, on top of the existing stamp duty and the SSD, if applicable, acquired by any person or entity, except a HKPR.
No exemption for Hong Kong companies
There are views that companies incorporated in Hong Kong whose shareholders and directors are all HKPRs should be exempted from BSD.
However, the Government takes the view that it would be difficult to put in place a mechanism that can effectively plug all the loopholes identified if exemption is granted to Hong Kong companies. Accordingly, the Bill maintains that BSD would still apply to all companies in order not to compromise the effectiveness of the BSD.
Acquisition for redevelopment
The Bill allows a refund of the BSD if the residential properties are acquired for redevelopment purposes. In other words, the buyers will still need to pay the BSD upfront and then apply for a refund subsequently.
Refund of the BSD (without interest) will be made upon application by a person (applicant) if the following conditions are fulfilled:
The six-year period is calculated from the following dates:
BSD may be refunded if the site has been transferred to an associated company under an intra-group transfer for which stamp duty is exempted under section 45. The refund is to be made to the transferee.
A building is considered "completed" on the date on which an occupation permit is issued.
Introduction into the Legislative Council
According to the Government, the Bill will be introduced into the Legislative Council on 9 January 2013.
The full version of the Bill is available via this weblink.
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