2025 Hong Kong Property Purchase | 5 Major Advantages and Considerations of Buying Property Through a Company

炒年糕的貓貓
Jul 15
3 min read

Updated: Aug 12

The Hong Kong government has completely withdrawn the property market "cooling measures" in 2024, significantly simplifying stamp duty rates. Non-permanent residents and local buyers are now subject to the same tax rates, substantially reducing the cost of home ownership! However, savvy investors have already begun exploring more long-term asset allocation strategies—purchasing property under a company name.

This article provides a detailed breakdown of the latest tax policies, the advantages of buying property through a company, and key considerations to help you make the smartest decision!

1. Latest Stamp Duty Policies for Hong Kong Property Purchases

Before the withdrawal of cooling measures:

Non-permanent residents were required to pay a 15% Buyer's Stamp Duty (BSD) + 15% Ad Valorem Stamp Duty (AVD), resulting in a total tax rate of up to 30%.
Local first-time buyers: AVD rates ranged from 1.5% to 4.25% (increasing with property value).

After the withdrawal of cooling measures:

All buyers (including non-permanent residents) are now subject to a unified standard Ad Valorem Stamp Duty (AVD) rate (capped at 4.25%).
Properties priced below HKD 4 million are subject to only HKD 100 in stamp duty.

2. What Does It Mean to Buy Property Under a Company Name?

Despite the significant reduction in tax burdens, astute investors are already exploring more strategic asset allocation approaches—holding properties through a corporate structure.

"Buying property through a company" refers to the purchaser setting up a limited company and acquiring the property under the company's name. In Hong Kong, a limited company has independent legal status, allowing it to hold assets, enter into contracts, apply for mortgages, and conduct property transactions. This model not only locks in the current low tax rate advantages but also creates additional value in terms of asset protection and wealth succession.

3. Five Major Advantages of Buying Property Through a Company

Advantage 1: Asset Risk Isolation

Legal risk isolation is a core function of a corporate structure. As a separate legal entity, a limited company's debts generally do not affect the personal assets of its shareholders. Even if the property is involved in litigation or financial issues, the shareholders' personal assets remain unaffected, making this suitable for high-net-worth individuals seeking risk diversification.

Advantage 2: High Privacy

Privacy protection mechanisms are highly valued in the luxury property market. Many property owners hold properties under a company name, avoiding the disclosure of shareholder details and making it difficult for outsiders to identify the true owner.

Advantage 3: Convenience in Wealth Succession

Cross-generational asset transfers are more convenient through a corporate structure. If parents wish to transfer a property to their children, a direct transfer would incur high stamp duty. However, if the property is held by a company, only the company shares need to be transferred, subject to a mere 0.2% stamp duty, significantly reducing succession costs.

Advantage 4: Tax Savings

Holding a property under a company name offers significant differences in the tax treatment of rental income.

If the property is rented out under an individual’s name, a 15% property tax is levied on the net rental income, with only a 20% standard repair allowance and limited deductible expenses.
If the property is held and rented out under a company name, the rental income is subject to profits tax. The first HKD 2 million of assessable profits is taxed at 8.25%, with the excess taxed at 16.5%. More importantly, all actual expenses (such as mortgage interest, maintenance fees, management fees, depreciation, etc.) are tax-deductible.

Advantage 5: Mortgage Advantages After the Withdrawal of Cooling Measures

Following the 2024 Policy Address, the maximum mortgage ratio for companies has increased to 70%, with a uniform debt-to-income ratio cap of 50%. Buying property under a company name—whether residential, commercial, or industrial—offers greater flexibility. However, mortgages cannot be applied for if the transaction involves a transfer of company shares.

4.Possibility of Future & Investment Strategies

While the government is currently stimulating the market by relaxing property policies, if property prices rebound rapidly, the government may reintroduce partial cooling measures, such as reinstating the Buyer's Stamp Duty (BSD) or Special Stamp Duty (SSD). Investors should plan ahead, capitalize on the current policy benefits, and implement risk mitigation strategies.

5. Key Considerations

Since the property is held under a limited company, the buyer must annually renew the Business Registration Certificate, hire an auditor to prepare audit reports, and comply with tax filing requirements to meet legal obligations for limited companies.

Additionally, compliance with the Companies Ordinance is required. Apart from appointing a company secretary, all expenditure, income receipts, and bank records must be retained for at least seven years. Annual filings, such as the Annual Return or corporate tax returns, must also be submitted.

Conclusion

Purchasing property through a company offers multiple tax deductions compared to holding it under an individual’s name. However, buying an investment property is a major life decision. Before making a decision, buyers should carefully assess their financial situation and consult professionals (such as Oceanus Strategic) for advice.