Land use rights can be obtained from the land administration department by agreement, tender or auction. However, Article 70 of The Property Law allows for ownership of exclusive parts within an apartment building, which endorses the individual ownership of apartments. You should pay the deposit at the submission of the Provisional Agreement (PA). The Imperial times were time and space dependent and were affected by wars, rebellions and natural disaster. However, there are some limitations to foreign ownership, for example, to the ownership of land. Thereafter rural private land ownership was effectively abolished through Land Reform, which left land in the hands of the state or the collective. Be prepared to bring the following documents prior to your meeting: As I mentioned earlier, the two biggest real estate agents are Midland and Centaline. The tenancy agreement will show the rights and restrictions your tenant has when leasing your property. A land user obtains only the land use right, not the land or any resources in or below the land. Given the significant affordability of property in the UK compared with Hong Kong, some BNOs may even consider buying multiple properties; one for personal use and one for investment. Property ownership for investment by foreign companies and individuals are prohibited. As a result, some people faulty believe that all leasehold agreements will expire in 2047, 50 years after the transfer to Mainland China. Foreigners and mainlanders don’t have any particular issues to buy real estate. Truth be told, I’m even surprised that you can apply for a property loan as a non-resident foreigner. They are responsible for certification of property titles. It is made either in cash (based on market prices) and accounts for any moving expenses or resettlement subsidies, or in kind (in the form of a replacement structure).[42]. In case you need a property loan, you should contact a handful of banks in Hong Kong to see if they can help. [40] As the state owns the land, compensation is not made for the loss of the rights holder's land use rights,[41] but for the private property which he had lost. Hong Kong property prices is through the roof, alot of people know that. – Rent that is not recoverable He is currently a freelance consultant supporting Asiaimportal (HK) Limited with content creation and research. Suggestion: Watch the 5 minutes video tutorial before reading this article, Do you plan to buy property in Hong Kong S.A.R.? The Hong Kong Controversy and Buying Land in China One of the most ruthless regulations in Hong Kong is that foreigners are not allowed to buy, lease, or inheritance land in Hong Kong, but you can “buy” land in mainland China. Hong Kong has grown from a small trading hub to become one of the top three financial centers in the world. If a rights holder wants to protect his property, he can evoke certain procedural safeguards, which include: In the event that an agreement cannot be reached between homeowners and the government, the expropriation can only be carried out after judicial review.[33]. The real estate market has been hit hard in Hong Kong during the COVID-19 pandemic. After the Chinese Communist Revolution in 1949, most land is owned by collectivities or by the state; the Property Law of the People's Republic of China passed in 2007 codified property rights. [29] The Property Law only offers a general guideline as to recordation. One of which is to first hold the minimum 30% premium for the property before you can borrow mortgage from a bank, so … All lease agreements were supposed to finish in 1997, just before the UK was to hand over Hong Kong to mainland China. The market has been hit badly during the COVID-19 pandemic and we’ve seen large-scale layoffs in industries like aviation and banking. Required fields are marked *. This is common in Asian countries and regions, including mainland China, Indonesia, Vietnam, Cambodia, and Thailand. However, the article neither provides, either in the constitution or in any subsidiary legislation, for the quantum of the payment, nor does it stipulate that the payment must be proportional to the size of the land. The first deposit is called ”the Initial deposit” and usually 5% of the purchase price. Land owned by the state was seen as "absolute" and therefore, did not warrant a title; a principle adhered to – and enshrined in regulation – until today. The total rate for the Initial Deposit and Further Deposit is 10% of the total price. Customers who are looking to finance a property overseas can apply for a mortgage in the following countries and regions: Australia, Canada, mainland China, France, Hong Kong SAR, India, Malaysia, New Zealand, Singapore, UAE, the UK and the US. With the passing of the Property Law, a number of local legislators fear that "while the new property law would undoubtedly increase protection for home owners and prevent land seizures, it would also erode China's socialist principles. Read hundreds of articles and expert interviews covering Asia property taxes, foreign ownership rules, projects & much more. Cushman & Wakefield, on the other hand, predicts drops of up to 20%. According to a report released by CBRE, houses now average at more than USD 1.2 million, resulting in locals that struggle to buy new homes. In January 2011,a 54-year-old man was beaten to death for refusing to leave his house that was expropriated for demolition. Example when calculating the property tax: + HKD 120,000 (HKD 10,000 x 12 months) If the seller breaks the agreement, he or she might need to pay an amount that equals one or two deposits in compensation to you. Global companies such as JLL believe that prices will fall as much as 10% to 15% in 2020. [26] Regardless of the method by which the land use rights is granted, a contract for grant of land use right, or more commonly known as a land grant contract, must be entered into by the land user and the local land administration authority or municipal governments at or above the county level as grantor.[27]. You can find much information about realtors on EAA’s website, they also have plenty of other practical info, like FAQs. Normally, this is done by the agent who helped you buy the property. Information and support for HR, global mobility managers, global teams and those relocating, operating in or setting up new operations overseas. In the past, both locals and mainland Chinese found ways to avoid paying the hefty stamp duties, as it was charged to permanent residents that were second-time home buyers. Furthermore, Article 10(1) allows for respective local rules of registration. The rates are as follows, in case the property was acquired after October 27th, 2012: Foreigners cannot become permanent residents by simply buying real estate. Keep in mind that the Provisional Agreement (PA) should include all necessary information about the property and what will happen if you or the seller withdraw from the deal. The unification of interests in a single registry is still not prevalent in the smaller cities and will take more time before its implementation.[29]. [14] This right may be established by means of assignment or transfer,[15] but transfer is limited. An investor who wants to invest or develop land or property in China must bear in mind China's property laws, most notably the property law introduced in 2007, which for the first time protects the interest of private investors to the same extent as that of national interests. Real estate prices have increased significantly in the past decade where mainland Chinese investors have been the main contributors. The agreement should be reviewed and signed by both yourself and the seller. All the land destined for public purposes is owned by the government. You need to pay three different deposits, as follows: The Initial Deposit is paid before the Provisional Agreement (PA) is signed and the rate varies between 3% – 5% of the purchase value. If your income comes from abroad, property loans are capped at HKD 3,000,000. [4]:6, China's Land Reform (1950-1952) was one of the largest examples of land expropriation in world history. [4]:5–6, There were several times of changes in ownership and control over land in China. This register is proof of ownership. Still, the government has introduced new regulations as late as 2018, something that can determine whether Hong Kong is a no-go for you. It can thus be seen that China's property laws have been undergoing developments. Some of the information that should be included in the PA is: You can visit EAA’s website to review a complete list of all the items that the PA should include. I generally include information about buying processes in my guides, Hong Kong is not an exception. Farm households negotiated contracts under which they had to deliver grain quota to the state at low fixed prices. Lastly, you’ll need to pay a Balance of Price, which is the remaining cost after you’ve cleared the balance of the remaining costs. Foreigners, including Hong Kong and Macau residents, are limited to buying one residential property for self-occupation only. It’s not the performer in terms of rental yields whatsoever, but there are other countries that might be more suitable if that’s your preference. How difficult is the property purchase process in Hong Kong? On August 3, 2018, the State Council announced that residents of Taiwan, Hong Kong, and Macau (‘THKM’) will no longer require work permits to work in mainland China. [11] There are several types of usufructuary rights. Some of the items the IRD will take into consideration are: A seller’s stamp duty (SSD) is charged with a rate that decreases progressively, depending on your holding period. There’s a reason why it has one of the world’s most expensive and most overvalued real estate markets. However, different interests might be registered under different registries. The Land Registry records documents related to ownership of land on behalf of the owner. Some of the agents I’ve found during my research and that you should consider contacting include: You can also find smaller foreign owned estate agents on places like Lantau Island, for example, HomeSolutions. [24] A land grant contract shall be entered into between the land user and the land administration department of the people's government at municipal or county level. There are no import taxes or VAT for that matter, a reason why many people buy electronics and other products when visiting Hong Kong. When you sign the Sales and Purchase Agreement (SPA), you need to pay the Further Deposit. In general, foreigners don’t have any problems getting local bank loans. Some examples are mortgages or restrictions to use the property. If you continue to use this site we will assume that you are happy with it. As it speaks, the buyer pays the stamp duty. Holders of security rights have priority if a debtor defaults on his obligation. Currently, the types of compensation are: However, the first two are paid to the collective landowners instead of the farmers. ), use rights of state-owned forest (includes use for mining, military purposes, etc. Meanwhile, the state drafted property laws, which were based on German and Japanese civil law traditions. [4]:60, In the areas controlled by Communist forces traditional land tenure was broken up through Land Reform. To make the leasing process as smooth as possible, I recommend you to let your real estate agent handle the tenant screening and the management of tenants. This makes Chinese real estate a depreciating asset. This results in a hefty stamp duty of 30%. – 20% of the allowance for maintenance and other related purchases. Downpayments differ depending on various factors such as your residential status and if you bought a house previously. This is similar to countries like Bangkok and Cambodia, for example. 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