Ad Valorem Stamp Duty Hong Kong: Scale 1 vs Scale 2 and How Much You Actually Pay
Since February 28, 2024, ad valorem stamp duty (AVD) is the only stamp duty that applies to residential property purchases in Hong Kong. The three demand-side management duties — Buyer's Stamp Duty (BSD), Special Stamp Duty (SSD), and New Residential Stamp Duty (NRSD) — were fully abolished under the Stamp Duty (Amendment) Ordinance 2024. AVD still has scale classifications, but the current residential Part 1 Scale 1 and Scale 2 instruments use the same progressive rate table.
Getting this calculation right before you exchange contracts matters: stamp duty is a large, non-financeable cash outlay due at completion.
The Two AVD Scales
Scale 2 (Concessionary Rates) applies to Hong Kong Permanent Residents who:
- Purchase in their own name (not through a corporate entity)
- Do not hold any other residential property in Hong Kong at the exact moment of executing the purchase contract
Other residential instruments include:
- Hong Kong residents (including HKPRs) who already own residential property in Hong Kong
- Corporate and company purchasers
- Non-permanent residents
The practical effect of the 2024 reform: Scale 2 remains the classification for qualifying individual first-time HKPR buyers, while the current residential Part 1 Scale 1 table uses the same rates. The old overlapping BSD and NRSD charges no longer apply.
Scale 2: The Rate Table for First-Time Buyers
| Property Consideration or Value (HKD) | Scale 2 Rate |
|---|---|
| Up to HK$4,000,000 | HK$100 flat |
| HK$4,000,001 to HK$4,323,780 | HK$100 + 20% of excess over HK$4,000,000 |
| HK$4,323,781 to HK$4,500,000 | 1.50% |
| HK$4,500,001 to HK$4,935,480 | HK$67,500 + 10% of excess over HK$4,500,000 |
| HK$4,935,481 to HK$6,000,000 | 2.25% |
| HK$6,000,001 to HK$6,642,860 | HK$135,000 + 10% of excess over HK$6,000,000 |
| HK$6,642,861 to HK$9,000,000 | 3.00% |
| HK$9,000,001 to HK$10,080,000 | HK$270,000 + 10% of excess over HK$9,000,000 |
| HK$10,080,001 to HK$20,000,000 | 3.75% |
| HK$20,000,001 to HK$21,739,120 | HK$750,000 + 10% of excess over HK$20,000,000 |
| HK$21,739,121 to HK$100,000,000 | 4.25% |
| HK$100,000,001 to HK$109,574,470 | HK$4,250,000 + 30% of excess over HK$100,000,000 |
| Above HK$109,574,470 | 6.50% (effective February 26, 2026) |
The HK$100 flat rate on properties up to HK$4,000,000 was introduced in the February 2025 Budget (extending the previous HK$3,000,000 threshold). It contributed to a 34% year-on-year surge in private transactions below HK$4,000,000 in 2025, with 14,024 such transactions accounting for 21% of all residential deals.
Residential AVD When Scale 2 Does Not Apply
If Scale 2 does not apply, the current residential Part 1 Scale 1 rate table is the same table shown above. This includes individual buyers who already own residential property and non-permanent residents. Corporate purchasers and any Part 2 issue should be confirmed with the Inland Revenue Department; old 7.5% and NRSD guidance is stale.
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Calculating Your Actual AVD: Three Worked Examples
Example 1: HK$3,800,000 — New Territories starter flat (first-time HKPR)
Property value: HK$3,800,000. Below the HK$4,000,000 threshold.
Scale 2 duty: HK$100
That's it. A flat-rate HK$100. This is the most significant single reform for mass-market first-time buyers in recent years.
Example 2: HK$5,500,000 — Kowloon two-bedroom (first-time HKPR)
Property value: HK$5,500,000. Falls in the HK$4,935,481–HK$6,000,000 tier.
Scale 2 rate: 2.25%
Duty = HK$5,500,000 × 2.25% = HK$123,750
Example 3: HK$8,000,000 — Urban flat (first-time HKPR)
Property value: HK$8,000,000. Falls in the HK$6,642,861–HK$9,000,000 tier.
Scale 2 rate: 3.00%
Duty = HK$8,000,000 × 3.00% = HK$240,000
When the Stamp Duty Is Due
AVD is assessed upon execution of the Formal Sale and Purchase Agreement. However, Hong Kong conveyancing practice allows solicitors to arrange a statutory postponement, with the physical payment made on Completion Day when the balance of the purchase price is settled.
The point is that stamp duty cannot be financed through your mortgage. It is a cash payment, due at completion, on top of your down payment, agency commission, and legal fees. For a HK$6,000,000 flat, you're looking at HK$135,000 in stamp duty alone — before any other closing cost.
The "First-Time" Rule: One Property, One Name
The Scale 2 concessionary rate is available only if you hold no other residential property in Hong Kong at the time of executing the purchase contract. The rules around this are strict:
- You cannot be listed as an owner, co-owner, or beneficial owner of any Hong Kong residential property.
- Properties held through corporate entities on your behalf technically count if a beneficial ownership analysis points to you.
- If you and your spouse are purchasing jointly and either spouse owns another property, the Scale 2 rate is not available to the joint purchase.
There is no "sell first, buy later" grace period built into the law — the test is whether you own another property at the precise moment of contract execution. If you need to sell your existing flat before qualifying, coordinate the timing carefully with your solicitor.
Non-Permanent Residents: What AVD Costs You Now
Before February 2024, a non-HKPR buyer faced BSD (15%) on top of AVD — a total tax burden that could reach 19–20% of a property's value. BSD is now abolished. Non-permanent residents pay the same current residential AVD rate table as other buyers in comparable circumstances. Do not label the applicable scale as Scale 2 or Scale 1 Part 2 without confirming the buyer and instrument details with IRD.
This is a significant change that made Hong Kong property accessible again to foreigners, overseas Chinese, and expats in a way it wasn't during the BSD era.
The Hong Kong First-Time Home Buyer Guide includes a complete stamp duty rate card, a worked calculation worksheet for your target purchase price, and a full upfront cost breakdown so you know exactly how much liquid capital to have ready before signing anything.
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