Purchaser’s solicitor does a land search at the Land Registry
Agency: Land Registry and online
It is a common procedure that the purchaser’s solicitor will conduct a land search before execution of the Agreement for Sale and Purchase (ASP) to ensure that the previous registration title of the property is complete and that no unusual encumbrance is registered against the property. All land records are available for search by the public by doing an online search. The service hours of an online search services have been extended from 16 to 20 hours daily since August 2010. In 2010/11, searches conducted online constituted about 91% of the total search volume. It is a common procedure that the purchaser’s solicitor conducts a land search online on the day of execution of the agreement for sale and purchase as a due diligence check. The prescribed fee is HK$25 for a full land search (which provides all historical and current data affecting the property) and HK$10 for an up-date land search (which provides the current data). This will take about one (1) day and in fact, immediately if it is done through the online internet service provided by the Land Registry, which many law firms in Hong Kong would have subscribed to such service.
Time and cost: Less than one day (online), HKD 25
Preparation of (i) Sale and Purchase Agreement and (ii) Assignment
Agency: Solicitors’ firm
The Property Assignment will give the purchaser legal title and possession of the property.
Time and cost: 5 days, HKD 41,304.23 (HKD 30,000 + 0.25% of value exceeding HKD 5,000,000 (solicitor’s fee according to Solicitors -General- Costs Rules (Cap. 159G) which is negotiable).)
Execution of Sale and Purchase Agreement and filing at the Land Registry
Agency: Land Registry
The purchaser’s solicitor registers the executed agreement for sale and purchase with the Land Registry. At this time, the purchaser usually gives a 10% down payment on the property and has time to arrange financing for the remainder owed. During the 30-day period, the purchaser’s solicitor prepares an assignment deed. In addition, during this period of time, the purchaser’s solicitor will complete perusal of title deeds and clarify any title issues with the seller’s solicitors and confirm good title to the purchaser (through a final land search on the property to ensure there has not been any competing deed lodged with the Land Registry after the executed agreement for sale and purchase has been registered with the Land Registry).
Time and cost: 22 days, HKD 210
The purchaser’s solicitor settles the stamp duty payable with the Stamp Office via e-stamping
Agency: Stamp Office
All necessary forms and documents for stamping can be submitted online (www.gov.hk/estamping.) or in paper. After the details of the transaction are submitted over the internet, a stamp invoice is issued immediately which can be printed. After the online payment of stamp duty, solicitors can print the stamp certificates and attach them to the instruments as evidence of stamping. Payment of the stamp duty can be done using different methods, (PPS, MasterCard, and Visa). The current payment limits for credit cards are HK$5,000.
If the duty amount exceeds the payment limits, payment can be made offline by printing a payment notice for settlement by telephone, bank ATM, internet or in person at the Stamp Office or Post Offices. After payment of stamp duty, a stamp certificate will be issued instantly and available for printing. Each stamp certificate will have its own “Stamp Certificate Number”.
For online payments and e-stamping, it is not required to present the original instruments to the Stamp Office. Details of the e-Stamping service in Hong Kong are available at www.ird.gov.hk/eng/tax/e_stamp.htm.
Both methods fulfill the stamping requirement equally. Under the conventional method no stamp certificate is issued, instead, the relevant document (e.g. the assignment) would be stamped by the Stamp Office with the value of stamp duty paid.
Time and cost: Less than one day (online), HKD 1,503,253.55 (7.5% stamp duty for non-residential property)
Purchaser’s solicitor registers the Property Assignment at the Land Registry
Agency: Land Registry
The duly stamped Assignment will then be presented by the solicitors to the Land Registry. The purchaser’s solicitor shall register the Assignment at the Land Registry within 30 days from the date of Assignment so as to preserve its priority under the law. After receipt of the original Assignment by the Land Registry,the Land Registry will complete the registration and return the Assignment to the solicitor’s office. The title is legally property of the purchaser once the Property Assignment is submitted to the Land Registry on the first day. The remaining days (or months) account for the Registry to document the transfer in microfilm and other media.
Time and cost: 1 day, HKD 450