April 2023 / Hong Kong

The introduction of the Bill aims to implement a measure to trawl for talents as announced in the 2022 Policy Address by introducing a refund mechanism (Proposed Refund Mechanism) under the Buyer's Stamp Duty (BSD) and New Residential Stamp Duty (NRSD) regimes for non-Hong Kong permanent residents (non-HKPRs) who have entered Hong Kong under designated talent admission schemes, purchased a residential property in Hong Kong on or after October 19, 2022, and subsequently become Hong Kong permanent residents (HKPRs).

A Government spokesman stated that under the Proposed Refund Mechanism, for an eligible incoming talent who acquired a residential property in Hong Kong on or after October 19, 2022, and has subsequently become an HKPR, he/she can apply for a refund of the BSD and the NRSD paid for the residential property which, at the time it was purchased, was his/her only residential property (save for replacing property) and he/she still holds on the date of the application for refund. The Ad Valorem Stamp Duty at Scale 2 rates (i.e. the rates applicable to first-time home buyers who are HKPRs) will still be payable such that the overall stamp duty charged will be on par with that charged on first-time home buyers who are HKPRs. The Inland Revenue Department will start accepting refund applications after the approval and gazettal of the new legislation.

"The Proposed Refund Mechanism can attract incoming talents to stay in Hong Kong for long-term development by substantially reducing their cost of property purchase, as talents who have a residential property in Hong Kong would have a higher propensity of staying here for good," the spokesman said.

The Bill will be introduced into the Legislative Council on April 19 for First Reading and Second Reading debate.

 The Acting Secretary for Financial Services and the Treasury, Mr Joseph Chan, welcomed the passage of the Inland Revenue (Amendment) (Child Allowance and Tax Concessions) Bill 2023 by the Legislative Council on April 19. It gives effect to two proposals made in the 2023-24 Budget, including:

1. the reduction of salaries tax, tax under personal assessment and profits tax for the year of assessment 2022/23 by 100 per cent, subject to a ceiling of $6,000 per case; and
2. increasing the basic child allowance and the additional child allowance for each child born during the year of assessment under salaries tax and tax under personal assessment from $120,000 to $130,000 starting from the year of assessment 2023/24.

"The two proposals mainly aim at alleviating the burden of taxpayers. The one-off tax concessions will benefit about 1.9 million taxpayers of salaries tax and tax under personal assessment, and 133 500 tax-paying businesses, with the total government revenue forgone amounting to about $9.2 billion. The increase in child allowance will benefit around 324 000 taxpayers and reduce the tax revenue of the Government by about $610 million a year," Mr Chan said.

The tax concessions will be reflected in taxpayers' final tax payable for the year of assessment 2022/23. Moreover, the Inland Revenue Department will apply the new level of child allowance in calculating the provisional tax for taxpayers for the year of assessment 2023/24.

Source: Ird.gov.hk

Hong Kong is proposing a refund mechanism under the Buyer's Stamp Duty (BSD) and New Residential Stamp Duty (NRSD) regimes for non-Hong Kong permanent residents (non-HKPRs) who have entered Hong Kong under designated talent admission schemes, purchased a residential property in Hong Kong on or after 19 October 2022, and subsequently become HKPRs. This measure is aimed at attracting incoming talents to stay in Hong Kong for long-term development by substantially reducing their acquisition cost of properties. However, the ad valorem stamp duty at Scale 2 rates (i.e. the rates applicable to first-time home buyers who are HKPRs) will still be payable.

To this end, the Stamp Duty (Amendment) (No. 2) Bill 2023 was gazetted on 6 April 2023 and will be introduced into the Legislative Council on 19 April 2023.