The reduced stamp duty rate on Hong Kong stock transfer will take effect from 17 November 2023

The 2023 Policy Address delivered on 25 October 2023 proposed to reduce the stamp duty rate on transfer of Hong Kong stock from 0.13% to 0.1% for each of the buyer and the seller. The legislative process for implementing the reduced stamp duty rate is now completed. The reduced stamp duty rate of 0.1% will be effective from 17 November 2023. 

The Chief Executive announced in the 2023 Policy Address that the stamp duty rate on transfer of Hong Kong stock would be reduced from 0.13% to 0.1% for both the buyer and the seller¹. 

The Stamp Duty (Amendment) (Stock Transfers) Bill 2023² implementing the reduced stamp duty rate was passed by the Legislative Council on 15 November 2023 and the corresponding Amendment Ordinance³ will come into operation on 17 November 2023.

Accordingly, for Hong Kong stock transfer to be executed on or after 17 November 2023, the stamp duty payable by both the buyer and seller will be 0.1% (i.e. the rate prior to 1 August 2021) of the consideration or the market value (whichever is the higher) of the stock transferred. 

Apart from the above, the 2023 Policy Address also proposed the below stamp duty measures in relation to transfer of residential property Hong Kong:

• reducing the rate of each of the Buyer’s Stamp Duty (BSD) and the New Residential Stamp Duty from 15% to 7.5%;
• shortening the applicable period of the Special Stamp Duty from 36 months to 24 months; and
• introducing a stamp duty suspension arrangement for acquisition of residential property in Hong Kong by certain incoming overseas talents who are a non-Hong Kong permanent resident at the time of the property acquisition. 

As a talent attraction measure, the above stamp duty suspension arrangement⁴ will replace the stamp duty refund arrangement for eligible incoming talents. Further details of the suspension arrangement can be found in the guidance issued by the Inland Revenue Department.

All of the above three stamp duty measures on residential properties are deemed to be applicable from 11am on 25 October 2023 pursuant to a Public Revenue Protection Order. The Stamp Duty (Amendment) (Residential Properties) Bill 2023⁵ containing the necessary amendments to be made to the Stamp Duty Ordinance was gazetted on 27 October 2023 and is currently under the review of the Legislative Council.

The reduction of the stamp duty rate on Hong Kong stock transfer back to the pre-August 2021 level demonstrates that the HKSAR Government has listened to the view of the business community and is committed to lowering investors' transaction costs on stock transfer, improving market sentiment, and enhancing the competitiveness of Hong Kong's stock market.