Buying Real Estate in Hong Kong
Buying real estate in Hong Kong is an option for many business expatriates who relocate to Hong Kong for work. You must deal with a solicitor in this process. Hong Kong is also very packed and very expensive, having some of the highest real estate listed prices in the world. The cheapest properties are usually located on the fourth floor, as the Cantonese word for four sounds like death, and this is taboo for many natives.
Read this New York Times article for more details about the real estate process.
Attorneys and Real Estate Agents
You will have to use a solicitor, or lawyer, throughout the process of buying property in Hong Kong. They are used in most stages of the conveyancing process, between the price offer and transfer of property. Buyers and sellers generally have their own personal solicitors. They are the ones who come up with the Sale and Purchase Agreement. Your solicitor will help you with some necessary steps, such as researching the property titles and draft the actual purchase deed.
It is up to you to choose a real estate agent, or buy from a real estate agent. Real estate agents are common in Hong Kong.
Rules, Regulations and Restrictions
There are no rules that restrict the foreign ownership of property in Hong Kong. Expats have the same rights as native people. However, this does not mean that it is easy to buy property, and it’s a time consuming task.
Be aware that Hong Kong uses a lot of British style laws, because it used to be under the United Kingdom, and certain factors are residual.
All of the land in Hong Kong is built on a government lease, which can last anywhere for a short period of time to 999 years. Be aware that the older leases are generally more simple than the newer ones. All land in Hong Kong is required to be government registered through the Land Registry.
The hardest part about buying real estate in Hong Kong is getting a mortgage. You must get one from a licensed bank in Hong Kong, and they will only grant you one if the land is properly registered. It is difficult for many native citizens to get mortgages, so it is even harder for expats. Banks in Hong Kong are often hesitant about lending money to those buying older properties.
General Process
First, you should find a property. Then make an offer to the seller. Before you sign a preliminary contract that secures this, you should probably get legal advice.
Then it is time for the contract. The Sale and Purchase Agreement is generally drawn up by the seller’s solicitor, and then approved by the your solicitor. You will both sign this document, and then you must put down a deposit, which is generally 3-5% of the total purchase price. You will agree upon a date of completion.
The conveyancing process then takes place. Your lawyer will help out with investigating the title and then drafting the purchase deed, which they will have to present to the seller’s solicitor for approval. Oftentimes, your bank will appoint your solicitor to draw up the mortgage and put together the mortgage deed. You will probably have to pay the seller a management fees deposit, public utilities deposit and other transferable deposits.
You and your solicitor should then have the completion check sent to the seller, so they can release the keys to one of the solicitors to give to you.
You’ll have to pay assorted fees throughout the process, including: the stamp duty (3% of purchase price), search fees for the land registry and companies registry, legal fees, land registration fees and estate agents commission.