BSD: buyer's stamp duty for non-permanent residents

If you are not a Hong Kong Permanent Resident (HKPR) buying a residential flat, you no longer have to pay Buyer’s Stamp Duty (BSD). The charge was abolished for any instrument of sale, purchase, or transfer of residential property executed on or after 28 February 2024. This guide explains what BSD was, how it worked, the refund mechanism for incoming talent, and what a non-permanent resident actually faces when buying today.

What was Buyer’s Stamp Duty (BSD)?

BSD was a flat-rate charge on top of the normal Ad Valorem Stamp Duty (AVD). It applied to anyone acquiring residential property who was not a Hong Kong Permanent Resident acting in their own name. This included:

• Individuals who did not hold a HKPR identity card.
• Any company, regardless of who owned or controlled it – even if the ultimate owner was a HKPR. The company itself was treated as a non-permanent resident.
• Joint buyers where at least one was not a HKPR.

BSD was charged on the higher of the property’s purchase consideration or its market value. It could not be waived or reduced at the point of purchase.

BSD rates and timeline

According to the Inland Revenue Department (IRD):

• 27 October 2012 – 24 October 2023: BSD was 15%.
• 25 October 2023 – 27 February 2024: The rate was halved to 7.5%.
• On or after 28 February 2024: BSD was abolished for residential property.

The abolition applies to any instrument of sale, purchase, or transfer executed on or after that date. BSD was not repealed for non-residential property (e.g. shops, offices), but in practice, the duty regime for that sector is separate.

How BSD affected a non-permanent resident buyer

Before the abolition, a non-HKPR buyer already paying AVD (which itself could be at Scale 1 rates – higher than the standard Scale 2 for first-time HKPR buyers) would also owe BSD. For a hypothetical flat costing $10 million:

• Under the 15% BSD regime: $1.5 million in BSD alone, on top of whatever AVD applied. Total stamp duty could exceed 20% of the price.
• Under the 7.5% regime (late 2023 – early 2024): the BSD portion fell to $750,000.

This made Hong Kong extremely expensive for foreign buyers and drove many to buy through shell companies – a strategy that BSD explicitly targeted by applying the charge to companies as well.

The refund mechanism for incoming talent

Between 25 October 2023 and 27 February 2024, there was a partial refund scheme: if a non-HKPR buyer who had paid BSD later became a HKPR, they could apply to the IRD for a refund of the BSD (but not the extra AVD paid under Scale 1). This was designed to attract overseas talent under schemes such as the Top Talent Pass Scheme. The refund required the buyer to:

• Still own the property at the time of becoming a HKPR.
• Apply within a set timeframe after obtaining permanent residency.

Because BSD is now abolished, this refund mechanism is effectively obsolete for future purchases, but it may still be relevant for anyone who bought residential property between late 2023 and February 2024 and has since obtained HKPR. Check with the IRD or a qualified tax adviser if you think you qualify.

What a non-permanent resident buyer faces today

Since 28 February 2024, a non-HKPR buyer of residential property pays only the applicable AVD – the same duty as any other buyer. However, the AVD regime has recent changes that apply equally to everyone:

• Residential property is charged under Part 1 of Scale 1 and Scale 2, which carry identical rates. The highest rate is 6.5% for consideration over $100 million, effective from 26 February 2026, as stated by the IRD.
• Non-residential property is charged under new Scale 3 (since 26 February 2026), which follows the same band structure as residential up to $21,739,120 but then caps at 4.25% with no higher band.

The banded structure can produce some non-intuitive jumps (for example, a small increase in price can mean a lower percentage rate for the whole amount). You must use the IRD’s official tax tables or calculator to determine the exact duty for your transaction.

Important: Before the 2024 reforms, a buyer who was not a HKPR first-time buyer was charged under Scale 1 rates, which were materially higher than Scale 2 (the standard rate for a HKPR first-timer). That distinction has been removed – now everyone pays the same residential rates regardless of residency or ownership history. For the precise historical Scale 1 percentages (if you need to understand past liabilities), consult the IRD’s historical rate tables.

Practical effect on overseas buyers

The abolition of BSD does three things for a foreign buyer:

1. Lower total upfront cost – you no longer have a 7.5% or 15% surcharge. The main duty is the banded AVD.
2. No need to buy through a company – since companies were also subject to BSD, many overseas investors used corporate structures. That advantage is gone (so check whether the company structure still makes sense from a tax perspective).
3. Potential for tighter mortgage lending rules – non-HKPR buyers often face stricter mortgage loan-to-value ratios. The IRD does not regulate mortgage lending, so check with your bank or the Hong Kong Monetary Authority’s guidelines separately.

What to check or do next

• Verify the current AVD bands. The IRD updates its stamp duty rates from time to time. Always check the official IRD Stamp Duty Rates page (search: "IRD stamp duty rates pdf") for the exact bands applicable on the date you will sign the sale and purchase agreement.
• Confirm your residency status. The definition of HK Permanent Resident is based on the Immigration Ordinance. If you are in Hong Kong on a work visa, dependent visa, or investment visa, you are not a HKPR until you obtain the right of abode. A simple Hong Kong Identity Card does not prove permanent residency – the card’s type matters: those with a "***" or "A" symbol are usually permanent residents.
• Run the numbers. Use the IRD’s online stamp duty calculator or a property agent’s tool, but always cross-check with the band table in the official PDF. For a hypothetical $10 million flat, at 3.75% AVD (the rate for that band as of the latest IRD figures), you would owe $375,000 – versus $375,000 plus $750,000 BSD if you had bought in early 2024.
• Engage a professional. Stamp duty refunds, company ownership structures, and cross-border tax implications are not DIY matters. A Hong Kong solicitor who specialises in conveyancing can advise on the exact instrument date and liability.