Hong Kong Real Estate Laws and Regulations

Published on October 31, 2025 and written by Cyril Jarnias

Hong Kong

With its unique blend of Eastern traditions and Western influences, Hong Kong is one of the world’s most dynamic metropolises. However, this fascinating city is also known for its complex real estate legislation, making it imperative for investors and residents to thoroughly understand the surrounding legal framework.

Cultural, economic, and political differences have shaped a set of distinct regulations that strongly influence the real estate market, ranging from ownership rules to rental management. Navigating this environment requires not only an understanding of local laws but also an ability to anticipate potential reforms that may be introduced in response to an ever-evolving market.

Property Ownership for Foreigners in Hong Kong

Specific Laws and Regulations

There are no specific restrictions regarding property purchases by foreigners in Hong Kong. Non-residents, including individuals and foreign companies, can acquire residential, commercial, or industrial properties on the same terms as local residents.

It is possible to purchase in one’s own name or through a corporate structure, without limitations based on nationality or residency status.

Restrictions on Property Types

There are no restrictions on the types of properties accessible to foreigners. They can acquire apartments, houses, offices, retail spaces, or industrial premises.

However, certain public properties or social housing (for example, Housing Authority properties) remain reserved for citizens or permanent residents, but these properties are not available on the open market.

Additional Taxes and Fees for Foreigners

Tax / Fee	Rate for Foreigners	Details
Stamp Duty	15% (Buyer’s Stamp Duty – BSD)	Applies to all non-residents or foreign companies
Ad Valorem Stamp Duty (AVD)	15% (for second property or more)	Added to BSD in certain cases
Special Stamp Duty (SSD)	10% to 20%	If resold within 36 months of purchase
Notary, agent, and registration fees	Variable	Additional, depending on price and service

The 15% Buyer’s Stamp Duty (BSD) applies to all residential property purchases by foreigners or foreign companies, in addition to standard stamp duties.

Special Stamp Duty (SSD): An additional rate (10% to 20%) is applied if the property is resold within three years of purchase.

Financing Process and Mortgage Loans

Hong Kong banks grant mortgage loans to foreigners. Since 2024, conditions have been aligned with those for local residents.

The maximum loan-to-value (LTV) ratio is set at 70% for everyone, including foreigners, for residential, office, commercial, or industrial properties.

The borrower must demonstrate that their monthly payments do not exceed 50% of their monthly income.

Income requirements and documentation have been relaxed, making credit access easier for non-residents.

Recent Reforms and Changes

In 2024, relaxation of credit conditions for foreigners: elimination of the 10% reduction requirement in loan amount compared to locals. The LTV is standardized at 70%.

New Capital Investment Entrant Scheme (CIES): Since March 2025, the investment threshold for obtaining permanent residency has been lowered, but real estate is explicitly excluded from eligible assets for this investor visa.

Reduced eligibility period for CIES: funds must be held for only six months (compared to two years previously).

Summary of Key Points to Remember:

• No purchase restrictions for foreigners on the open market.
• Specific taxes: additional stamp duties (BSD 15%), SSD for quick resale.
• Credit access facilitated and aligned with residents since 2024.
• No possibility of obtaining residency through real estate investment under the new CIES since 2025.

The legal and tax framework in Hong Kong remains one of the most open in Asia for real estate investment by foreigners, subject to bearing increased taxation.

Main Real Estate Laws in Hong Kong: What You Need to Know

Landlord and Tenant (Consolidation) Ordinance

• This law governs the relationship between landlord and tenant for residential and non-residential leases.
• It requires landlords to notify of any new lease or renewal via form CR109, to be submitted within one month of the event. Without this notification, they cannot legally claim rent payment.
• Grounds for immediate lease termination include: non-payment of rent after 15 days, illegal use of premises, persistent nuisance, or structural modifications without landlord consent.
• The landlord must provide a rent receipt for each payment.
• Rent increases are not strictly regulated for new leases, but any excessive demand can be challenged by the tenant.
• Upon expiration of a fixed-term lease, it automatically ends, unless renewal is agreed or there is a renewal clause.
• A lease can be terminated before its term only in case of serious breach or if a break clause provides for it.

Impact and Ethical Aspects: These rules aim to balance the rights of both parties, enhance transparency, and prevent abuse. Professionals must ensure document compliance and respect tenants’ rights.

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Buildings Ordinance

• This law sets safety, construction, and maintenance standards for all buildings in Hong Kong.
• Owners are responsible for maintaining their buildings in good condition, including structural safety, maintenance of common areas, and compliance with fire safety standards.
• Any structural modification requires prior official authorization.
• In case of non-compliance, authorities can impose sanctions and require corrective work.

Impact and Ethical Aspects: This ordinance protects the safety of occupants and the public. Investors must conduct technical audits and ensure compliance of acquired or leased properties.

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Land Registration Ordinance

Aspect	Main Requirement	Legal Consequence
Transaction Registration	Any sale or transfer must be registered promptly	Failure to register may make the transaction unenforceable against third parties and expose to legal risks
Parties’ Obligations	Buyer and seller must guarantee transparency and accuracy of documents	Non-compliance may lead to nullity or challenge of the sale

Impact and Ethical Aspects: Registration protects property rights and secures transactions. Professionals must verify title accuracy and absence of hidden charges.

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Real Estate Tax Legislation

• Special Stamp Duty (SSD): ad valorem tax imposed on residential real estate transactions resold within a short period (24 to 36 months depending on purchase date).
• Objective: discourage speculation and stabilize the market.
• Implications:
  • Investors must plan holding period to avoid heavy taxation.
  • Buyers and sellers must include this tax in total operation cost calculation.

Impact and Ethical Aspects: SSD limits speculative investments and protects first-time buyers. Professionals must clearly inform clients of tax implications.

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Public and Social Housing Regulation

• Several subsidized housing programs exist for low-income residents:
  • Public Rental Housing
  • Access to reduced-price ownership (Home Ownership Scheme)
• Recent reforms aim to increase supply and accelerate allocation of social housing.
• Eligibility criteria are strict and controlled by authorities.

Impact and Ethical Aspects: These measures alleviate the housing crisis and promote social inclusion. Private sector actors must respect quotas and not circumvent allocation rules.

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Summary Table of Market Impact and Ethical Compliance

Law / Regulation	Impact on Real Estate Market	Ethical/Professional Compliance Aspects
Landlord and Tenant Ordinance	Legal security, relationship stability	Respect for rights, documentation, transparency
Buildings Ordinance	Safety, property value enhancement	Technical control, responsibility towards occupants
Land Registration	Transaction security, attractiveness	Title accuracy, fraud prevention
Real Estate Taxes (SSD)	Reduction of speculation	Client information, total cost calculation
Public/Social Housing	Inclusion, limitation of speculation	Respect for social criteria, access equity

Real Estate Taxation: A Guide for Investors

Real Estate Taxation in Hong Kong: Taxes, Deductions, and Recent Developments

Types of Taxes Related to Real Estate Transactions

• Stamp Duty
  • Main tax on real estate transactions in Hong Kong.
  • Since February 26, 2025, the ad valorem rate is progressive based on property value:

  Transaction Amount or Value (HKD)	Stamp Duty Rate
  Up to 4,000,000	HKD 100
  4,000,001 to 4,500,000	1.5%
  4,500,001 to 6,000,000	2.25%
  6,000,001 to 9,000,000	3.00%
  9,000,001 to 20,000,000	3.75%
  Over 20,000,000	4.25%

  Several additional duties may apply for non-residents or in case of secondary purchase.

• Capital Gains Tax
  • There is no specific tax on real estate capital gains for individuals or local companies.
  • However: if the activity is deemed by tax authorities as regular real estate trading, then profits may be subject to profits tax.
• Estate Duties
  • No estate duties have been applied since their abolition in February 2006.

Tax Credits and Deductions for Investors

• For Individuals
  • Deduction of mortgage interest up to a certain annual ceiling when calculating salaries tax.
  • Deduction of actual expenses related to rented property (e.g., maintenance fees).
• For Companies
  • Standard regime: taxation under profits tax on net rental income after deduction of allowable expenses (interest expenses related to property financing; current fees; property taxes).
  • Reduced rate for SMEs: first HKD 2 million of profits taxed at a preferential rate.

Regulatory Specificities and Tax Incentives

No dedicated tax incentives for foreign investments in conventional residential real estate; identical regime for residents/non-residents except possible additional duties for acquisitions by non-residents.

Mixed-use properties (e.g., commercial ground floor + residential floors) generally fall under the same tax rules as those separately applicable to both usage types; however, tax allocation according to actual use may sometimes be necessary.

Specific sectoral measures exist for certain segments:

• Temporary partial concessions on property tax (“rates waiver”).
• Enhanced incentives in maritime/logistics sector through accelerated depreciation or targeted reductions.

Recent Examples of Legislative Changes Impacting Real Estate Taxation

Date	Measure
February 2025	Increase of fixed duty ceiling HKD100 up to HKD 4M vs previously HKD 3M.
Budget 2025/26	First quarter: temporary partial exemption/reduction “rates waiver”/”rates concession”.

Practical Tips for Optimizing Tax Planning as a Real Estate Investor

• Prefer holding through a local company if regular commercial activity is the goal to potentially benefit from the preferential SME regime and secure position with tax authorities regarding the actual nature of operations (trade vs pure investment).
• For individual investors wishing to rent their properties:
  • Optimize borrowed amount so that most interest paid is effectively deductible each year under salaries tax/personal assessment;
  • Ensure declaration of all allowable expenses related to maintenance/rental management;

Note:
Hong Kong remains a particularly attractive jurisdiction thanks to its historical absence of direct taxation on capital gains and estates as well as its moderate effective rates compared to many other international financial centers.

Frame your projects with prior analysis from local advisors to:
– Anticipate any possible reclassification by authorities,
– Choose between direct or indirect holding,
– Carefully follow each annual legislative modification influencing duties/taxes applicable to future or existing transactions.

Rights and Responsibilities of Property Owners in Hong Kong

Rights of Property Owners in Hong Kong

The rights of property owners in Hong Kong are governed mainly by the Landlord and Tenant (Consolidation) Ordinance (Cap. 7), the Building Code, and various administrative regulations. These rights include:

• Property Access: Acquisition of residential properties is open to residents and non-residents alike. Since the 2024-2025 Budget, restrictive measures such as Special Stamp Duty (SSD) and Buyer’s Stamp Duty (BSD) have been removed, making property access more flexible and allowing purchase of multiple properties with reduced stamp duty on acquisitions below HK$3 million.
• Rental Rights:
  • Right to freely set rent amount at initial signing.
  • Right to access the property to conduct necessary inspections or work, subject to reasonable notice to tenant.
  • Possibility to initiate eviction proceedings in case of non-payment of rent or substantial lease violation.
• Protection Against Unfair Evictions:
  • Judicial procedures must be followed for any eviction: a landlord cannot evict a tenant without obtaining a court order.
  • The court assesses whether the claimed reason is legitimate before any authorization.

Legal Responsibilities of Property Owners

Main obligations include:

• Structural maintenance and major repairs
• Strict compliance with Building Code (Buildings Ordinance)
• Ensuring electrical, sanitary, and gas installations are safe
• Prompt restoration after report by tenant

Obligations Towards Tenants:

• Provide safe and habitable housing
• Not interfere with tenant’s peaceful enjoyment
• Return any deposit under contract conditions

Domain	Key Responsibility	Specific Obligation
Safety	Comply with fire/gas/electricity codes	Mandatory regular inspections
Maintenance	Repair leaks/roofs/load-bearing walls	Imposed reasonable deadlines
Information	Provide required documents at signing	Written contract mandatory

Legal Procedures in Case of Dispute

In case of conflict between landlord and tenant:

1. Prior attempt at amicable settlement recommended
2. Possible referral to Lands Tribunal to rule on:
   • Contested evictions
   • Disputes concerning deposits or repairs
   • Abusive increases
3. Enforceable decision may include financial orders or injunctions

Potential Consequences in Case of Non-Compliance

If a landlord fails to meet obligations:

• Administrative fines or even criminal penalties depending on severity
• Immediate court order to perform necessary work
• Increased risk of class actions if multiple properties affected

Regarding illegal eviction, conviction may lead to:

• Compensatory damages paid to tenant
• Temporary or permanent prohibition from certain real estate activities

Recent Statistics & Landmark Case Law

Cases recorded by Lands Tribunal (2024):

• Non-compliance maintenance/safety: +12% vs 2023
• Evictions deemed “unjustified”: nearly 1 in 5 cases resulting in substantial compensation

Notable jurisprudential example:

In March 2024, in [case name], decision requiring the latter to completely renovate his building after repeated findings of unsanitary conditions despite successive notices; record fine HK$450,000 imposed + full restitution of rents collected during concerned period.

⚠️ Any serious breach exposes the owner not only to civil but also criminal penalties depending on the exact nature of violations observed, as well as negative publicity likely to durably affect professional reputation.