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Buying another resi property

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  1. #1

    Join Date
    Apr 2020
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    Buying another resi property

    Hi, besides buying in another family members name, is there any way i can avoid 15pc stamp duty for BSD?

    I am thinking if its possible i set up a company to buy the property off me, sell to the company and then sell the company to a family member thus freeing up one name for myself to buy without this restriction?


  2. #2

    Sorry, but that doesn't work as the transfer to the company will be subject to the 15% BSD. See question 6 of the HKSAR Govt's FAQ on BSD attached.

    If your family member is a HK permanent resident, could you buy it in their name?

    Separately, there are some exemptions listed in question 9.

    https://www.ird.gov.hk/eng/faq/bsd.htm

    markranson, jpence and shri like this.

  3. #3

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    thanks, that is helpful.

    i guess my only choice is cash only to buy an already existing company owned property (which becomes a lot more complex eg knowing what the outstanding liabilities are)- anyone has experience doing so?

    and furthermore once owned is it easy to refinancing assuming i am just a salaried employee which can provide guarantee on the loan?


  4. #4

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    Original Post Deleted
    - your sarcasm is noted and appreciated.

  5. #5

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    @jpence - you need to talk to a estate agent who has company listings to get the scoop. Also, check with your conveyancing lawyer if they've done company purchases. Also you'd need to get an opinion from an accountant on how to manage that company going forward and how to minimize your company maintenance expenses.

    Owning and operating the company will be non-trivial as you'll be expected to have a functioning holding company - which will mean a bunch of annual payments, audit and filings.

    Also, check with the banks - they have different approval thresholds for company owned mortgages.


  6. #6

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    There should be some type of insurance you can get for company liabilities. Have come across it before when selling companies owning ships.


  7. #7

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    Given the direction of housing prices, I think the middle classes will start squealing in approximately 3 months, and in roughly 3 months and 1 day the foreigner tax will be withdrawn.

    Probably only a marginal impact overall in this market, but maybe worth holding on for.


  8. #8
    Quote Originally Posted by GentleGeorge:
    Given the direction of housing prices, I think the middle classes will start squealing in approximately 3 months, and in roughly 3 months and 1 day the foreigner tax will be withdrawn.

    Probably only a marginal impact overall in this market, but maybe worth holding on for.
    Quite possibly - if the market sags too much, removing the BSD for HK residents might be a first step towards stabilising the market. Removing the BSD for non-HK residents might take a little longer?

    That said, the demand for smaller units by first home buyers seems to have picked up over the long weekend with the reduction in the deposit requirements:

    https://www.thestandard.com.hk/secti...market-sizzles

  9. #9
    Original Post Deleted
    Although as was discussed extensively here at the time, some of the cooling measures including the BSD had the effect of reducing the supply of properties in the secondary market (much like capital gains taxes tend to do). It was a poorly thought out populist tax.

  10. #10

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    Original Post Deleted
    It has done the opposite of what it was intended to do, it has reduced supply and increased prices, so if you're not happy about prices and perceive it as 'harm' then you have this to blame
    traineeinvestor likes this.

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