Owning a Home in Hong Kong

6 min read|Last Updated: September 14, 2021|

The rigid loan-to-value mortgage requirement to try and keep a lid on prices by the government has not succeeded in keeping prices down, and Hong Kong property is among the most expensive in the world. The highest cost is the stamp duty levied on the property being bought. 

The average price of a home is more than $1.2 million. High demand and short supply have driven property prices to “unaffordable” levels in recent years.

Why Own A Home In Hong Kong?

Since most of the Hong Kong territory is mountainous, there are many high places where you can enjoy watching the breathtaking scenery of the city, the islands, and the sea. Besides, there are parks and beaches that are easily accessible anytime via public transportation.

Behind the ridge to the south of the island are quiet villages favored by the affluent, of whom most are expatriates.

Options Available For Owning a Home in Hong Kong

  • You can own home through the transfer of property. The transfer may be from a parent, family member, relative, friend or other sources, or
  • You can own home through the purchase of a property.

Mortgage insurance program

You can apply for a loan with a higher Loan-To-Value (LTV) ratio as set by the Hong Kong Monetary Authority. In this arrangement, your deposit could be hundreds of thousands of dollars instead of millions. However, this means you have to pay a premium for the insurance. As a pre-requisite, the bank will work out your debt-to-income ratio and conduct a stress test to ensure you can pay back the loan. It is usually a 20 to 30 years commitment.

You should ensure you have money for emergencies like getting seriously ill (or paying bills for a seriously ill family member) or losing your job and also factor in the increased payments if interest rates rise.

When to buy a home

Prices of homes usually go down during crises like amidst recession or pandemics like corona and sometimes during periods when people have many expenses to take care of like school openings. Therefore, it is usually an excellent time to buy a home as people are likely to sell their properties at prices a bit lower than peak times.

Can A Foreign Expatriate Own A Home In Hong Kong?

All foreigners can own a home in Hong Kong except Afghans, Albanians, Cubans, North Koreans and Chinese from the mainland (unless they are permanent residents in another country). Foreigners can buy properties such as apartment houses and rent them out without restriction.

To cool the market and put off overseas speculation, the government has imposed an extra 15% Buyers’ Stamp Duty on foreign sales. There is also an additional duty for owning a second home and for homes resold within three years.

Guide to Owning a Home in Hong Kong

You can purchase a home privately or through a real estate agent. The following are steps that one may follow as a guide to owning a home:

  1. The buyer first surveys and selects the property of their choice out of those that have been put out for sale.
  2. The buyer and seller then meet and agree on the price of the home that is to be purchased, and how it is going to be paid. They also agree on who is paying certain legal fees.
  3. The buyer then pays an initial deposit of up to 5% of the purchase price as a legally binding contract.
  4. Solicitors are appointed to negotiate drafting of formal agreement of sale. The formal agreement document is prepared by the seller’s solicitor, who then passes it to the buyer’s solicitor, who counter-checks them.
  5. The seller is to sign the document and then the buyer.
  6. The buyer now pays up the remaining deposit and is now considered as insuring the property.
  7. Finally, the buyer receives the title deed who may ask for further clarification (requisitions). Once satisfied, a date is set for vacant possession of the property, the payment of the balance, and the stamp duty to the authorities. The buyer also has to settle the Land Registry fee, which is usually HK$210.

What happens if the parties pull out?

The contract signed during the first deposit will state how much each party will lose if they back out from that point onwards. There are various penalties for pulling out, such as:

  • Lost deposit should the buyer pull out;
  • Compensation should either party pull out.

Ad Valorem Stamp Duty (AVD) is levied on sale or transfer of property in Hong Kong unless there are specific exemptions. The stamp duty tax rate varies with the value of the property bought.

Then there is the Special Stamp Duty (SSD) levied on residential property if it is resold within 24 to 36 months. The rate varies depending on the period that the property was acquired and the holding period before it was resold.

One is also to pay solicitor’s fee of around 0.075% to 0.125%

How long does it take to complete the purchase?

The process of buying a property in Hong Kong can take six to eight weeks in total.

Want to Start business in Singapore
Want to Start business in Singapore

Getting a Real Estate Agent

Most buyers prefer to use an estate agent. Hong Kong real estate agents must be licensed, as stated by the Setae Agents Ordinance. Agents can be found on the website of the Estate Agents Authority. The buyer’s agent fee is normally charged at 0.5% to 1% of the total property value.

You will be required to sign an estate agency agreement with an agent, which includes the period of the agreement, the commission, and how it will be paid. In addition, the agreement outlines whether the buyer is working just for you who is the buyer or for the seller too. If working for both, the agent must state how much commission he/she is charging each party.

The agent then prepares a provisional agreement signed by both buyer and seller, and it includes the agreed price, who is paying a certain legal expense; the name & address of buyer and seller; and the date of completion.

How to Achieve Your Personal Goal towards Owning a Home

  • Assess your finances and pay off outstanding debts as soon as possible so that you don’t pile them.
  • Come up with a realistic saving plan.
  • Set a monthly budget
  • Cut down on expenses. These are extra expenses that you can do without. However, be sure not to gamble with your health, it can hinder you from achieving your goals.

Advantages of Owning a Home As Opposed To Renting

  • No fear of being sued or evicted for rental arrears.
  • No managerial or damage charges levied required from you.
  • You get the opportunity to save the little money that could have gone to rent.


Due to the high property prices, someone who has just started working and still has loans like student loans to pay may take 10 to 20 years to get enough deposit owning even a small apartment. It is not easy, but with focused determination and a well laid out saving plan towards it, the dream usually comes true. And there are always loans available for those wishing to buy a home. Buying a first home is less expensive than buying a second and subsequent homes.

Despite the stamp duty levied on both residents and expatriates plus the high property costs, owning a home is always better than renting.

Owning a Home in Hong Kong FAQs

How expensive are rental houses in Hong Kong?2020-10-19T07:29:07+00:00

Although most rental premises are of high standards, the rental fees are relatively higher. A onebedroom will cost approximately USD 1,500-2,500. 

How much does a home cost in Hong Kong?2020-10-19T07:28:43+00:00

Hong Kong is one of the countries that have relatively higher costs of homes globally. With the increase in demand and lesser supply, the cost of acquiring a home in Hong Kong keeps shooting with the figure as of 2019 was t averagely $1.2 million. The government is looking for solution to this predicament. 

Can Foreigners Buy Properties in Hong Kong?2020-12-02T03:22:47+00:00

Foreigners are permitted to buy properties as condominiums in Hong Kong, and they are permitted to rent the property at a fee without imposing any restrictions on them. However, foreigners from Afghans, Albanians, Cubans, North Koreans and Chinese from the mainland are not permitted unless they are permanent residents in another country.

Why Do I need to own a home in Hong Kong?2020-10-19T07:26:50+00:00

If you are a homeowner, you will not have a fear of eviction from your home over rent areas. Besides, you will have additional money that you would otherwise spend on rent. No charges like damages will be deducted from your account balance.

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