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4. Purchasing a Property

4.1 Offer Letter
4.2 Land Search
4.3 Initial Deposit
4.4 Formal Sales & Purchase Agreement
4.5 Completion of the deal in normal
4.6 Stamp duty schedule

4.1 Offer Letter

Your agent will submit an offer to the landlord on your behalf. Once an agreeable offer is achieved, the agent will prepare a “Provisional Sales & Purchase Agreement” which terms are binding to both parties once the document is executed by both parties.

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4.2 Land Search

Prior to committing to the ‘Provisional Agreement’ it is important to check on the right of ownership. Your agent provide you with the most current land search from the land office showing the legal ownership of the seller.

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4.3 Initial Deposit

An initial Deposit which needs to be agreed will be paid upon signing of the Provisional Sale & Purchase Agreement. This deposit is non-refundable and penalty will be implemented according to the terms stated in the agreement should either party decided to withdraw from the agreement.

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4.4 Formal Sales & Purchase Agreement

This will be drafted by the solicitor. Further deposit will be equivalent to 10-15% of the agreed sale price will be paid as agreed.

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4.5 Completion of the deal in normal

Normal practice is minimum one month from signing of the Formal Agreement.

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4.6 Stamp Duty Schedule

Rates on stamp duty for property sales transactions is charged at rates which vary with the amount or value of the consideration as follows:-

Amount or Value of the Consideration Rate
Exceeds Does Not Exceeds
- HK$1,000,000 HK$100
HK$1,000,000 HK$1,080,000 HK$100 + 10% of excess over HK$1,000,000
HK$1,080,000 HK$2,000,000 0.75%
HK$2,000,000 HK$2,176,470 HK$15,000 + 10% of excess over HK$2,000,000
HK$2,176,470 HK$3,000,000 1.5%
HK$3,000,000 HK$3,290,320 HK$45,000 + 10% of excess over HK$3,000,000
HK$3,290,320 HK$4,000,000 2.25%
HK$4,000,000 HK$4,428,570 HK$90,000 + 10% of excess over HK$4,000,000
HK$4,428,570 HK$6,000,000 3%
HK$6,000,000 HK$6,720,000 HK$180,000 + 10% of excess over HK$6,000,000
HK$6,720,000 - 3.75%

For further information about stamp duty, please visit the government website at http://www.ird.gov.hk/eng/tax/sdu.htm

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