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Hong Kong: Special rates, vacant “first-hand” private residential units

Hong Kong: Vacant first-hand private residential units

Legislation—the Rating (Amendment) Bill 2019—published in the official gazette on 13 September 2019 would provide “special rates” for vacant “first-hand” private residential units with an occupation permit issued for 12 months or more, unless the units have been sold or have been leased for over 183 days during the reporting period.


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The special rates would be imposed at a flat rate of 200% of the “rateable value” of the subject residential unit. The government has proposed to exempt units permitted for domestic use in certain types of premises as well as hotels and guesthouses.

A first-owner who holds a unit would be required to submit an annual return to the Rating and Valuation Department (RVD) to declare the status of the residential unit during the past 12 months. Penalties and fines would be imposed for a failure to submit returns to the RVD within a specified period or a failure to notify the RVD within a specified period after cancellation of sale and purchase agreement.

The measures are intended to encourage a more timely supply of first-hand private residential units.

KPMG observation

The legislation is expected to be introduced into the Legislative Council following the first Council meeting in the 2019/20 legislative session. The legislation could have implications for real estate developers.  Affected companies would want to determine that they make timely and accurate submission of the required information, and need to consider reviewing their current holdings.


For more information, contact a KPMG tax professional:

Linda Zhang | +1 (212) 954-2423 |

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