Stamp Duty Refund Policy and ASMTP Heat Up Property Market in Hong Kong
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Detailed analyses of the impact of the Admission Scheme for Mainland Talents and Professionals (ASMTP), Top Talent Pass Scheme & Stamp Duty Refund policy in HK.
Since normal travel between Hong Kong and the Mainland fully resumed, the government has actively launched a series of measures under the name of "Competing for Talents and Enterprises" in the hope of attracting mainland talents to Hong Kong and replenishing the depleted population. Among these measures, the stamp duty refund policy for property purchased by foreign talents, who entered Hong Kong under designated talent admission schemes, is very popular among mainland talents. This article offers a detailed explanation of the refund policy and its impact on the property market in Hong Kong to help Hong Kong residents and non-residents alike to invest with ease.
What is the Admission Scheme for Mainland Talents and Professionals (ASMTP?)
The Admission Scheme for Mainland Talents and Professionals ("ASMTP") is launched by the government in Hong Kong to attract mainland professionals with special skills, knowledge and experience to work in Hong Kong. These mainland professionals are required to be employed by local companies before coming to Hong Kong, and their work responsibilities and remuneration packages should be broadly comparable to the applicant's qualifications and market salaries. Among the six major talent schemes, the ASMTP is one of the most popular ones among mainland professionals, attracting an average of 10,000 successful applicants each year.
What is the difference between the Admission Scheme for Mainland Talents and Professionals (ASMTP), the Quality Migrant Admission Scheme (QMAS) and the Top Talent Pass Scheme (TTPS)?
Unlike the Admission Scheme for Mainland Talents and Professionals (ASMTP), the Quality Migrant Admission Scheme (QMAS) seeks to attract highly-skilled or highly-talented persons to settle in Hong Kong. Successful applicants are not required to have secured local employment prior to entering Hong Kong. Instead, each applicant will be awarded points under one of the two points-based tests under the QMAS and compete for quota allocation with other applicants. The QMAS has a higher application threshold, and an annual quota of 4,000 will be lifted from 2023 onwards, drastically lowering applicants' chances of success.
Under the Top Talent Pass Scheme (TTPS), highly talented persons include high-income earners and graduates of the world's top universities. Applicants are not required to have secured a local contract or an offer of employment in the HKSAR at the time of the application. Provided that they fulfill the normal immigration requirements, they may be granted 24 months' stay on time limitation without other conditions of stay.
How do talent visa schemes like the ASMTP affect the property market in Hong Kong?
Talent visa schemes for mainland professionals, such as the ASMTP, have low thresholds, high approval rates and speedy processing time. With one application, mainland professionals can bring their whole family to relocate to Hong Kong. Not only can these schemes fill the gap caused by the noticeable emigration, but they can also offset the impact of rising interest rates and become one of the forces pushing Hong Kong's property market to go up. Since 2016, the ASMTP alone has attracted more than 75,000 mainland talents to Hong Kong, and the number has been on the rise. The industry generally believes that mainland professionals will likely become a force to reckon with in the property market next year, with medium-priced apartments priced above $10 million and luxury properties benefiting the most.
Stamp Duty Refund as Tax Relief Policy for Talented Migrants
In his Policy Address in 2022, the Chief Executive, Mr. John Lee Ka–chiu, announced measures to cool the property market by refunding eligible overseas talents and professionals the additional stamp duty for purchasing properties in Hong Kong. After residing in Hong Kong for 7 years and becoming a Hong Kong permanent resident, an eligible professional can apply for a refund of Buyer's Stamp Duty (BSD) and New Residential Stamp Duty (NRSD). However, they are still required to pay Ad Valorem Stamp Duty (ADV) at the rates under Scale 2.
Take a residential unit priced at HK$ 10 million as an example; a non-local resident would have to pay 15% Ad Valorem Stamp Duty (AVD) and a 15% Buyer's Stamp Duty (BSD), i.e., a total of 30% as a part of the "market-cooling" measures, and would have to pay HK$ 3 million stamp duties. However, under the tax refund/relief policy for talents and professionals, eligible overseas professionals can apply for a refund of the AVD and BSD and pay stamp duties as first–time home buyers, with a reduced rate from 30% to 3.75%. The actual stamp duty paid will be lowered substantially, from HK$ 3 million to HK$ 375,000, saving the buyers HK$2.625 million.
Elimination of travel restrictions accelerates property market's upturn
After the elimination of all Covid-related travel restrictions, Hong Kong's local economy is gradually returning to normal, something that the local property market is also benefitting from. According to primary sales numbers from the Agreements for Sale and Purchase of Residential Building Units in 2023, the first quarter sees 2,780 sales, more than double that of the previous year's fourth quarter. Even without the stamp duty refund for property purchases for talents and professionals, mainland investors are still eager to come to Hong Kong and invest in the property market personally or in the name of their companies. In the past, mainland buyers may have been deterred by the market-cooling measures. Yet, now, with both the advantages of the tax rebate policy for property purchase and the resuming of all normal travel, the property market in Hong Kong will likely be boosted.
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Due to the stamp duty relief policy benefiting talents and professionals from overseas, property prices, as well as the transaction rate of second-hand properties, are expected to rise in the future.
Want to seize the opportunity and take advantage of market opportunities? Contact us and allow our consultant team to find the right residential property according to your needs.
Previous Article Hong Kong Monetary Authority Loosens Mortgage Ratios: Properties Priced Under 15 Million HKD Can Borrow Up to 70% - Clear Review of the New Policy
What is the Admission Scheme for Mainland Talents and Professionals (ASMTP?)
The Admission Scheme for Mainland Talents and Professionals ("ASMTP") is launched by the government in Hong Kong to attract mainland professionals with special skills, knowledge and experience to work in Hong Kong. These mainland professionals are required to be employed by local companies before coming to Hong Kong, and their work responsibilities and remuneration packages should be broadly comparable to the applicant's qualifications and market salaries. Among the six major talent schemes, the ASMTP is one of the most popular ones among mainland professionals, attracting an average of 10,000 successful applicants each year.
What is the difference between the Admission Scheme for Mainland Talents and Professionals (ASMTP), the Quality Migrant Admission Scheme (QMAS) and the Top Talent Pass Scheme (TTPS)?
Unlike the Admission Scheme for Mainland Talents and Professionals (ASMTP), the Quality Migrant Admission Scheme (QMAS) seeks to attract highly-skilled or highly-talented persons to settle in Hong Kong. Successful applicants are not required to have secured local employment prior to entering Hong Kong. Instead, each applicant will be awarded points under one of the two points-based tests under the QMAS and compete for quota allocation with other applicants. The QMAS has a higher application threshold, and an annual quota of 4,000 will be lifted from 2023 onwards, drastically lowering applicants' chances of success.
Under the Top Talent Pass Scheme (TTPS), highly talented persons include high-income earners and graduates of the world's top universities. Applicants are not required to have secured a local contract or an offer of employment in the HKSAR at the time of the application. Provided that they fulfill the normal immigration requirements, they may be granted 24 months' stay on time limitation without other conditions of stay.
How do talent visa schemes like the ASMTP affect the property market in Hong Kong?
Talent visa schemes for mainland professionals, such as the ASMTP, have low thresholds, high approval rates and speedy processing time. With one application, mainland professionals can bring their whole family to relocate to Hong Kong. Not only can these schemes fill the gap caused by the noticeable emigration, but they can also offset the impact of rising interest rates and become one of the forces pushing Hong Kong's property market to go up. Since 2016, the ASMTP alone has attracted more than 75,000 mainland talents to Hong Kong, and the number has been on the rise. The industry generally believes that mainland professionals will likely become a force to reckon with in the property market next year, with medium-priced apartments priced above $10 million and luxury properties benefiting the most.
Stamp Duty Refund as Tax Relief Policy for Talented Migrants
In his Policy Address in 2022, the Chief Executive, Mr. John Lee Ka–chiu, announced measures to cool the property market by refunding eligible overseas talents and professionals the additional stamp duty for purchasing properties in Hong Kong. After residing in Hong Kong for 7 years and becoming a Hong Kong permanent resident, an eligible professional can apply for a refund of Buyer's Stamp Duty (BSD) and New Residential Stamp Duty (NRSD). However, they are still required to pay Ad Valorem Stamp Duty (ADV) at the rates under Scale 2.
Take a residential unit priced at HK$ 10 million as an example; a non-local resident would have to pay 15% Ad Valorem Stamp Duty (AVD) and a 15% Buyer's Stamp Duty (BSD), i.e., a total of 30% as a part of the "market-cooling" measures, and would have to pay HK$ 3 million stamp duties. However, under the tax refund/relief policy for talents and professionals, eligible overseas professionals can apply for a refund of the AVD and BSD and pay stamp duties as first–time home buyers, with a reduced rate from 30% to 3.75%. The actual stamp duty paid will be lowered substantially, from HK$ 3 million to HK$ 375,000, saving the buyers HK$2.625 million.
Elimination of travel restrictions accelerates property market's upturn
After the elimination of all Covid-related travel restrictions, Hong Kong's local economy is gradually returning to normal, something that the local property market is also benefitting from. According to primary sales numbers from the Agreements for Sale and Purchase of Residential Building Units in 2023, the first quarter sees 2,780 sales, more than double that of the previous year's fourth quarter. Even without the stamp duty refund for property purchases for talents and professionals, mainland investors are still eager to come to Hong Kong and invest in the property market personally or in the name of their companies. In the past, mainland buyers may have been deterred by the market-cooling measures. Yet, now, with both the advantages of the tax rebate policy for property purchase and the resuming of all normal travel, the property market in Hong Kong will likely be boosted.
–
Due to the stamp duty relief policy benefiting talents and professionals from overseas, property prices, as well as the transaction rate of second-hand properties, are expected to rise in the future.
Want to seize the opportunity and take advantage of market opportunities? Contact us and allow our consultant team to find the right residential property according to your needs.
Previous Article Hong Kong Monetary Authority Loosens Mortgage Ratios: Properties Priced Under 15 Million HKD Can Borrow Up to 70% - Clear Review of the New Policy
05 AUG 2023
