Buying HK property for non-PR and/or foreign property investment

[stargirl71]

Hi. My husband and I are looking at various property investment options, one of them being to buy something in HK. We don't yet have our PR and the closest either of us is to that is still about 3 years away. Can someone kindly (please) provide the current correct information (or a link) regarding the stamp duty issue/s and also what the bank would require from us as far as a deposit etc. goes (and anything else relevant)? Is there any way around paying the higher stamp duty or any suggestions? Is this just a bad idea all round?!

Other option is to buy something back in Australia (we already rent out our home there), but as non-residents for tax purposes now, we're in the 32% tax bracket on rental income... Though given the weaker AUD currently, perhaps now is a good time to be buying. If we did take this route, what do those with far more experience and knowledge see as the pros and cons of borrowing the money in HK vs. borrowing in AUS. Obviously the interest rates are lower here in HK, but we already have an existing relationship with the bank in Australia (and pre-approval). What kind of deposit, again, would be looking at to borrow here, to buy O/S property?

Must add, we would be open to looking at foreign property investment in other places as well. I have dual citizenship for the UK so not sure if that is of any help for anything???

Thanks and cheers!

[Oldtimer]

In addition to the normal stamp duty , you will have to pay 15% more.
Total stamp duty will vary depending on the value of the property. Please check the scale.
Mortgage will depend on your income and the value of the property.

What is the BSD rate?
The new BSD will be 15% on the stated value or the actual market value of the flat in which the higher amount will be applicable. The BSD is a separate tax that will be added onto the existing Ad Valorem Stamp Duty and Special Stamp Duty if also applicable.

Who has to pay for this duty?
Only the buyer or transferee of the residential flat is subject to paying this property tax.

[OffThePeak]

If I was going to buy in the UK, I would look outside London

Here's why:
http://imageshack.com/a/img526/8384/grlondtouk.gif
(It's the Ratio of London prices to "the Rest of the UK")

Since that chart was made, It got even worse.

When the Baby boomers retire, do you think they will stay in London?
My friends there are selling their London properties, and moving away from London, where they can buy something nicer for half the price.

Have you looked at places like the Philippines and Thailand, which are far cheaper than HK, the UK, Australia, or Singapore? Future growth there may be better too,

[jimbo]

Offthepeak

Thailand Has it's own rules for foreigners buying property there, needs to be in a Thai residents name.

Similar with Malaysia too unless purchasing over 1.6m myr.

[OffThePeak]

Not necessarily.
In Thailand, you can buy a Condo, if no more than 49% of the condos in the project are owned by foreigners. There is a problem buying land however.

I think there is a similar restriction, at a different level in the Philippines. We have bought condos in both countries

[bdw]

I own in both Aus and Hong Kong. But these days I am not buying anymore in these countries. I'm buying in Malaysia and considering others like Thailand etc. Its quite easy to do from HK since there are so many HK locals doing the same thing, the big property developers have seminars and exhibitions in HK hotels every weekend where you just rock up, talk to the developer, bank, solicitor etc all at the same time, swipe your credit card for the deposit, and walk out with a new property.

By the way, Malaysia minimum price for foreigners is 1m not 1.6m. That's about $2.5m hkd so not overly expensive.

[OffThePeak]

You can do that, BDW.
And I often go to those seminars.
But I have found you can get better bargains by dealing more directly.
We bought our Chiangmai flat (2BR, for about HKD 930,000) in Chiangmai, and were impressed that the showflat was for Thais, not foreigners.

Our Philippines property, we bought thru ALVEO, Ayalaland's affiliate, and not thru a HK hotel.

[bdw]

You may be right but I suspect is case by case. I bought mine from Mahsing, one of the biggest developers in Malaysia. When they run the exhibition in HK, they are not out to rip people off. HK locals are smarter than that. Its also pretty easy to research online what they are charging to locals in Malaysia through online forums etc so you can judge for yourself.

For secondary properties, you are right. Do lots of research, go local, and you can save lots of money. Its a much finer skill. But for brand new properties, I find most times is quite transparent and I generally find these hk exhibitions are fair and reasonable and not some kind of scam.

[OffThePeak]

Yes.
I agree on all that.
If you are going to buy through a Hotel in HK, then do the research.
We signed a cashback reservation on a property in Chiangmai, at around PHP 126,000 / SM.
We went to see the property, and declined, and got our money back.

Later, we wound up buying something we liked better.
Price: just under PHP 60,000 / SM - that's about HKD 1,330 per sf, Net.

For the property marketed at the Hotel, I think they were relying on people NOT doing the research, and who would be blinded by their branding efforts. The branding might help, but the gap was just too big,

We also thought the area of the first property was too "touristic" without enough decent shopping. (Send me a PM, if you want to know where we bought - I don't want to blast it out to everyone reading this thread.)

[eli]

If you're looking for something in Aus, why not join our session on Tuesday - it's a game aimed at buying and selling real estate and this week's edition is all about Australia.

Even if you're not looking for something in Australia, people have used the game to help understand the buying process and what's involved (though it does vary between countries).

Each country has many smaller markets and there's a lot to consider, along with your own situation.