Abolition of double ad valorem stamp duty on non-residential property transactions

07 December 2020, Tax, Legal Alert, by Stefano Mariani,

In response to the extraordinary economic and social impact of the ongoing Covid-19 public health crisis, the Government of Hong Kong has sought to provide support to the beleaguered commercial property sector. In the 2020 Policy Address, the Chief Executive announced the abolition of the Double Ad Valorem Stamp Duty (DSD) on non-residential property (NRP) transactions pursuant to the Public Revenue Protection (Stamp Duty) Order 2020 taking effect from 26 November 2020. DSD was introduced in 2013 to control the soaring prices of NRPs. With DSD, buyer’s stamp and special stamp duty continuing to apply to residential properties, the Government’s current stimulus measure is therefore in effect restricted only to commercial properties.                                                    

DSD replaced by Scale 2 Rates

The abolition of DSD means that from 26 November 2020 onwards, NRP transactions will attract the same stamp duty rates as those for qualifying residential properties, under head 1 in the First Schedule to the Stamp Duty Ordinance (Scale 2 Rates). This represents approximately half of the previous applicable rates for NRP transactions. The table below lists out the Scale 2 Rates. A certificate for value is required if the applicable rate is not 4.25%.

Amount or value of consideration (x)

Stamp duty chargeable

x ≤ HK$2,000,000


HK$2,000,000 < x ≤ HK$2,351,760

 HK$100 plus 10% of the amount by which x exceeds HK$2,000,000

HK$2,351,760 < x ≤ HK$3,000,000

1.5% of x

 HK$3,000,000 < x ≤ HK$3,290,320

HK$45,000 plus 10% of the amount by which
x exceeds HK$3,000,000

HK$3,290,320 < x ≤ HK$4,000,000

2.25% of x

 HK$4,000,000 < x ≤ HK$4,428,570

HK$90,000 plus 10% of the amount by which
x exceeds HK$4,000,000

HK$4,428,570 < x ≤ HK$6,000,000

3% of x

HK$6,000,000 < x ≤ HK$6,720,000

HK$180,000 plus 10% of the amount by which
x exceeds HK$6,000,000

HK$6,720,000 < x ≤ HK$20,000,000

3.75% of x

HK$20,000,000 < x ≤ HK$21,739,120

HK$750,000 plus 10% of the amount by which
x exceeds HK$20,000,000

x > HK$21,739,120

4.25% of x


In the sale and purchase of NRPs, the Scale 2 Rates apply to both agreements for sale or conveyances, as appropriate. Similarly, when a person exchanges a residential property for an NRP and pays consideration for equality, stamp duty will be charged on the agreements and instruments according to the Scale 2 Rates.


The Government evidently envisages that the abolition of DSD will decrease transaction costs in the commercial property market and so encourage its revitalisation. Whilst the elimination of DSD on NPR presents an interesting opportunity to acquire or otherwise restructure commercial property holdings, any recovery in that market will in practice likely be predicated on the medium-term outlook for commercial property. 

Prospective effect

Interested parties should note that the abolition of DSD only applies prospectively from 26 November 2020. It does not affect: (i) an instrument executed before that date; (ii) an agreement for sale that supersedes another conforming agreement for sale made before that date; or (iii) a conveyance on sale executed in conformity with an agreement for sale made before that date.

How we can help

We have extensive experience advising our clients on stamp duty efficient structuring in complex and commercially sensitive transactions and should be pleased to assist in this regard.