• Moving to Hong Kong

    Property, schools, and tax guidance, tailored to Hong Kong.
    • Property in Hong Kong

      Overview

      Hong Kong is one of a small number of truly global cities, sought after by the world's richest individuals and is now considered Asia's most expensive destination for house hunters.

      House prices have surged 120% from 2008 and 34% from their peak in 1997, with an average home now costing the equivalent of 12.6 times an average annual income, according to the International Monetary Fund. However, the government has recently introduced a range of measures to try to cool the market, including increasing stamp duty and tightening credit. As Simon Smith from Savills Hong Kong says, "New government measures have brought the market to a near standstill and further price falls can be expected before volumes are re-activated." Savills predicts that residential prices will drop by a total of 10% to 15% in the coming years. (http://www.scmp.com/property/hong-kong-china/article/1275552/hong-kong-real-estate-agents-hit-policies-cool-property and http://pdf.savills.asia/asia-pacific-research/hong-kong-research/hong-kong-residential/ress05-2013.pdf)

      Typical Property Prices

      Apartments on the eastern side of downtown are worth on average HK$6.3 million and can be rented out for about HK$10,000 a month. A 60 square meter apartment on Hong Kong Island costs around HK$125,000 a square meter, or HK$7.5 million in total, according to the Rating and Valuation Department. (http://www.scmp.com/news/china/article/1283844/luxury-cage-homes-25-tenants-squeeze-posh-beijing-apartment and http://www.bloomberg.com/news/2013-03-21/hong-kong-homes-face-20-price-drop-as-banks-raise-rates.html)

      The Purchasing Process

      In a bid to curb speculation, the Hong Kong government has imposed measures whereby buyers who aren't permanent residents must pay a tax of 15% for any residential property purchases. Meanwhile all land is held on government leases of 50 years. Any prospective buyer should be aware that as a result of the Sino-British joint declaration of 1984 all leases which were due to expire in 1997 were extended for 50 years but what will happen to all leases after 2047 is still a little unclear. (http://online.wsj.com/article/SB10001424052970203922804578080691384244814.html).

      Buying Costs

      Buying costs include:

      Taxes

      Hong Kong has one of the world's most attractive tax regimes with no capital gains tax and no estate duty.

      There is a special levy on rental income which is subject to property tax at 15% on the net assessable value of the land and buildings.

    • Schools in Hong Kong

      Overview

      Hong Kong offers the options of either local school or an international school education for ex-pat children.

      Local schools

      Local schools usually conduct classes in Cantonese, although most also teach English. Children start school at the very early age of two or three years old. Hong Kong schools are known for being extremely competitive and operate strict codes of discipline. Classes can be large.

      Primary schools in Hong Kong traditionally ran classes on a half day basis, either mornings or evening classes, however this is changing and the majority of schools now have full-day attendance. On some occasions students are requested to attend school on alternate Saturdays. (http://www.tuition.com.hk/education-system.htm).

      Local schools have high standards of education. The curriculum tends to be focused on repetition-based learning.

      While schools in Hong Kong are well-regarded academically, it is usual, in this part of the world, for ex-pats to choose private international schools to educate their children.

      International schools

      There are many international schools to choose from in Hong Kong and most teach the British, American or Australian curriculum, although other countries are also represented. Tuition varies widely.

      Some local students also choose to study at international schools to obtain a foreign education. The application process for an international school in Hong Kong can include entrance exams and a number of other enrolment criteria. The international school year tends to run from September through to July.

      Places at the best schools are snapped up quickly, so it is advisable to put your child's name down on the waiting list as soon as possible. Places are held with a reservation fee.

      Some employers bulk-buy places for their employees' children. But if you are paying for your child's education, note in advance that international schools in Hong Kong can be expensive and budget accordingly.

    • Tax in Hong Kong

      Hong Kong taxes only income earned there. Expatriates and residents are taxed at either a low 2% to 17%, depending on income level, or a standard rate of 15%. However, tax is paid in a lump sum rather than monthly and the first tax instalment will include a provisional amount for the next tax year. Your first tax bill, therefore, can be uncomfortably high.

      There is no capital gains tax. A double tax agreement between the UK and Hong Kong came into effect in 2011.

  • The information displayed here is correct as of 18/07/2013 and is for general information purposes only. If a customer requires tax advice they should consult their own professional advisers, and not rely on the information contained herein. The greatest care has been taken to ensure accuracy but the Bank cannot take responsibility for omissions or errors. Tax levels or relief are those currently applicable and may change. The value of any tax relief depends on the individual circumstances of the investor/customer.

    The information contained in this guide is based on our understanding of current law and tax authority practice and may be liable to change, which could be with retrospective effect. No liability can be accepted for the effect of any subsequent legislation of change of official practice.

    Account Holders, depending upon their individual circumstances, may be liable to income tax in respect of interest earned offshore.

    It is your responsibility to ensure that any tax liability in relation to funds deposited is accounted for by you to your appropriate tax authorities.

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