July 2023 / Hong Kong

The Government Gazette published today (June 2) contains a Legal Notice to the effect that the Secretary for Financial Services and the Treasury has authorised a change in the rate of interest payable on Tax Reserve Certificates. From June 5, 2023, the new annual rate of interest will be 0.8083 per cent against the current rate of 0.7667 per cent, i.e. the new rate will be $0.0674 per month per $100.

Tax Reserve Certificates bear simple interest, and interest is calculated monthly (including part of a month) from the date of purchase to the date of payment of tax.

Interest is only credited when certificates are used to pay tax and no interest is due where the principal value of a certificate is repaid to its holder.

The rate of interest payable on Tax Reserve Certificates is periodically revised in line with the market trend. Currently, it is reviewed every month based on the average prevailing interest rate for the 12-month time deposit for $100,000 to $499,999 offered by the three note-issuing banks.

The new rate will apply to all certificates purchased on or after June 5, 2023. Certificates purchased before June 5, 2023, will continue to earn interest at the rates prevailing on their respective purchase dates. Below is a summary of the interest rates for the past periods:

The Government welcomes the passage of the Stamp Duty (Amendment) (No. 2) Bill 2023 by the Legislative Council today (June 21), which implements a measure to trawl for talent as announced in the 2022 Policy Address by introducing a refund mechanism under the Buyer's Stamp Duty (BSD) and the New Residential Stamp Duty (NRSD) regimes to attract talent from around the world to stay in Hong Kong for long-term development, thereby enriching the talent pool of Hong Kong. The Deputy Chief Secretary for Administration, Mr Cheuk Wing-hing, said, "The refund mechanism will bring the overall stamp duty charged on eligible incoming talents on par with that charged on first-time home buyers who are Hong Kong permanent residents (HKPRs), hence reducing the cost of home purchase for those incoming talents who are able and wish to buy residential properties in Hong Kong. We believe that this measure will help incentivise incoming talents to purchase homes and reside in Hong Kong in the long run, which would inject impetus to the growth of Hong Kong." Under the refund mechanism, for an eligible incoming talent who has entered Hong Kong under a designated talent admission scheme, acquired a residential property in Hong Kong on or after October 19, 2022 (i.e. the date of announcement of the 2022 Policy Address), and subsequently becomes 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 the applicant's only residential property (save for replacing property) and the applicant 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.

Source: ird.gov.hk