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The cost of purchasing property via a company continues to decrease. This is because the Budget announced on February 26, 2025, stated that for residential/non-residential property transactions with a price of $4 million or below, the Ad Valorem Stamp Duty (AVD) rate is a flat $100. This increases the limit by $1 million from the original price of $3 million or below, effective immediately from February 26, 2025.
Furthermore, the government announced the full “withdrawal of cooling measures” as early as February 28, 2024, immediately canceling the New Residential Stamp Duty (NRSD), Buyer’s Stamp Duty (BSD), and Special Stamp Duty (SSD). Buying and selling property in a company name now only requires the payment of Ad Valorem Stamp Duty (AVD). Combined with the 2025 AVD adjustment, property transactions via companies have become even more active.
What is purchasing property via a company? Can a limited company be used to buy and sell property?
“Purchasing property via a company” refers to buying and holding property in the name of a limited company. Since a Hong Kong limited company is a separate legal entity, it can buy and sell property and other assets in its own name, in addition to conducting business.
More details: Benefits of Registering a Limited Company
Simple concept: Define a limited company as a natural person. It can sign sale and purchase agreements, apply for mortgages, and lease out property in its own capacity. The only difference is that the ownership of the property belongs to a Hong Kong limited company rather than an individual.
However, it must be noted that whether a property is held and leased by an individual or a company, it is defined as a business activity. Rental income must be reported and property tax must be paid in accordance with the law.
Stamp Duty for Purchasing Property in a Company Name 2026
Since February 28, 2024, whether the buyer is a Hong Kong permanent resident, a foreign passport holder, or a company purchasing residential property, they only need to pay Ad Valorem Stamp Duty (AVD).
From February 26, 2025, if the property price is HK$4 million or below, the stamp duty for purchasing in a company name is a flat HK$100. If the property value is above HK$4 million, the rate ranges from a minimum of 1.5% to a maximum of 4.25% of the property price.
Details are as follows:
If the property value is HK$4,000,000 to HK$4,323,780
The AVD is HK$100 + 20% of the amount exceeding HK$4 million;
If the property transaction price is HK$4,323,781 or above
The AVD ranges from 1.5% (minimum) to 4.25% (maximum) of the property price.
Example of Stamp Duty for Purchasing Property in a Company Name
If a property is purchased in a company name for HK$4.2 million on or after February 26, 2025, the stamp duty payable is calculated as follows:
HK$100 + (HK$4,200,000 – HK$4,000,000 = HK$200,000) x 20% = HK$40,100
Source: 2025/26 Government Budget
Difference Between Purchasing Property in a Company Name and Property Transfer via Company Share Transfer
It should be noted that purchasing property in a company name requires the payment of Ad Valorem Stamp Duty (AVD). However, when a property is transferred via a company share transfer, the new buyer does not need to pay AVD; instead, they pay stamp duty on the transfer of company shares.
Therefore, both buyers and sellers must be clear whether they are “purchasing in a company name” or purchasing the property through the “transfer of limited company shares.” The stamp duty for transferring limited company shares is calculated at 0.2% of the transaction amount or the asset value, whichever is higher.
More details: Transfer of Limited Company | Company Sale and Purchase Agreement
8 Major Steps for Purchasing Property via a Company
1. Incorporate a Limited Company
The first step in buying or selling property in a company name is to own a Hong Kong limited company. There are three main ways to set up a limited company:
New Company Incorporation
The client proposes their own company name. The fee is approximately HK$4,500 – HK$6,000, and it takes about 7-10 working days.
Express Package
The fee for same-day company incorporation is approximately HK$5,500 – HK$7,000. The Certificate of Incorporation and Business Registration Certificate can be obtained as early as the same day, but two working days should be reserved for preparing the company’s green box.
Ready-Made Company
Select a successfully registered Hong Kong limited company from a list of ready-made companies**. Since the Certificate of Incorporation, Business Registration Certificate, and green box already exist, the company transfer procedures can be completed as early as the same day.
**It is recommended to use a ready-made shelf company to purchase property; there is no need to wait for approval from the Companies Registry, making it the most guaranteed method!
Further reading: Purchasing Property via a Shell Company | 5 Major Benefits of Purchasing Property via a Ready-made Company
2. Appoint a Real Estate Agent
Just like an individual purchasing property, buying property through a company involves using a property agent to introduce listings and select a suitable unit.
3. Appoint a Solicitor
If you find a suitable unit, you should appoint a solicitor with relevant experience to clarify the details of purchasing property via a limited company.
4. Prepare Meeting Minutes
A solicitor must be appointed to prepare minutes of meetings for shareholders and directors according to the Articles of Association. These should include the address of the property being purchased and the authorized representative to handle the property purchase for the Hong Kong company.
5. Pay Deposit and Sign Provisional Sale and Purchase Agreement
The company’s authorized representative must bring the company’s signature stamp to sign the sale and purchase agreement in the name of the limited company and pay the property deposit.
6. Open a Company Bank Account
Make an appointment with a bank to apply for a company business account. Generally, an online appointment is made and account opening documents are submitted first. After the bank’s preliminary approval, directors and shareholders must visit the bank in person to complete the account opening procedures.
7. Apply for a Property Mortgage
Purchasing property in the name of a limited company allows for a mortgage loan of approximately 70%, meaning a 30% down payment must be prepared. Furthermore, a company shareholder must act as a personal guarantor. Details are subject to bank approval.
8. Completion
On the completion day, the solicitor will handle matters such as property payment and the mortgage. Once completed, you can collect the keys, finishing the process of purchasing property via a limited company.
7 Major Benefits of Buying and Selling Property in a Company Name
1. No Profits Tax on Property Sales via Company Transfer
Whether it is a natural person or a limited company reselling property for profit within a short period, the Inland Revenue Department will treat the resale as a business activity. The profits will be subject to Profits Tax at a rate of 8.25% – 16.5%.
However, by transferring limited company shares to a buyer (assignee), the company’s assets—including the property—are transferred to the new buyer. Since this is not a simple sale of property, it does not involve tax on property appreciation profits. Both parties only need to pay a 0.2% stamp duty on the transfer of limited company shares.
2. Tax Arrangements
If a non-Hong Kong resident holds a passport from a country with worldwide taxation, it means that in addition to income from their home country, income from all over the world (including Hong Kong), such as property rental income, is subject to tax in their home country.
In Hong Kong, limited company tax filing and an audit report signed by a certified public accountant are required annually. Therefore, investing in property through a company makes income and profits clearer, facilitating analysis and tax planning by tax consultants.
Further reading: [Conditions for Setting Up a Company] Can non-Hong Kong residents open a company?
3. Flexible Profit Handling
A company can choose to retain profits or distribute them as dividends, allowing for flexible management of company cash flow and, depending on tax arrangements,
deferring personal income tax (in worldwide taxation countries).
4. Clearer Property Ownership
Before a company purchases property, the shareholders have already established their shareholding ratios. This means the proportion of company shares held equals the proportion of property ownership.
The property purchased by the company is an asset of the limited company. If multiple people invest in a property with a large investment amount, buying and selling in a company name makes management easier and clearly reflects property ownership.
5. Tax Rate as Low as 8.25%
Another benefit of purchasing property via a company for rental investment is that company Profits Tax replaces Property Tax. Rental income for property held in an individual’s name is treated as Property Tax. The rate is 15% of the net assessable value, which is the annual rental income minus a standard allowance of 20% for repairs and outgoings.
Investing via a limited company involves paying Profits Tax. The tax rate is 16.5% of the net profit after deducting expenses. If the net assessable profit is below HK$2 million, the rate is only 8.25%.
Source: GovHK – Property Tax | Inland Revenue Department – Profits Tax
6. 6. Deductible Expenses
When leasing property in the name of a limited company, basic company operating expenses can be used for tax deduction. Examples include real estate agent commissions for leasing, legal fees, and reasonable purchases of computer supplies or mobile phones. Additionally, you can enjoy Profits Tax deductions such as allowances for commercial buildings and structures, depreciation allowances, and refurbishment deductions.
Further reading: Tax Deductions for Setting Up a Company
7. Higher Potential for Property Value Appreciation
When a property is held by a limited company, the selling price may be higher than similar units. This is because a new buyer purchasing the property via a company transfer can use the 0.2% share transfer tax rate instead of the AVD. The higher the property price, the more the new buyer saves on property tax. Experience shows that properties sold via a company name generally command a slightly higher price than similar units.
4 Major Considerations for Company Property Transactions
1. Profits Tax Payable on Resale
Whether property is held by an individual or a company, if the purpose is speculation rather than investment, Profits Tax must be paid on the appreciation profits.
If a property is bought and sold by a company within a short period for profit, the Profits Tax is calculated at 8.25% to 16.5% of the profit after deducting company expenses.
2. Method for Calculating Profits Tax on Company Property Transactions
A company purchases a property for HK$7 million and sells it for HK$10 million.
The company’s profit is HK$10 million – HK$7 million = HK$3 million.
Profits Tax = HK$2,000,000 x 8.25% + HK$1,000,000 x 16.5% = HK$330,000**.
**Note: The net profit does not subtract the company’s own deductible expenses. This example is a rough calculation for reference only.
Further reading:
3. Mortgages for Purchasing Property in a Company Name
The documentation required for a bank mortgage when purchasing property in a company name is relatively complex. It is recommended to consult a bank or mortgage consultant beforehand regarding the necessary documents and interest rates. Generally, banks require company shareholders to act as personal guarantors, so shareholders must calculate whether their personal repayment ability meets bank requirements before the company purchases the property.
4. Cost Budgeting
In addition to incorporation costs, there are annual maintenance fees for a limited company, including tax filing, annual returns, and company secretarial services. These costs must be calculated and compared in your budget.
Frequently Asked Questions
Q: What factors determine whether it is more suitable to buy property as an individual or through a company?
A: It generally depends on factors such as property value, investment orientation, and tax arrangements. However, every case is different. It is recommended to consult a professional accounting or tax consultant for a customized tax solution.
Q: How much are the legal fees for buying and selling property in a company name?
A: They are generally slightly higher than for individuals and may be adjusted based on the company structure and nationality.
Q: Can an unlimited company purchase property?
A: No, because an unlimited company does not have a separate legal status and cannot hold assets in its own name.
Further reading: What is the difference between an unlimited company and a limited company?
Conclusion
The 2025 Budget adjusted the Ad Valorem Stamp Duty, further reducing the cost of purchasing property in a company name. From February 26, 2025, the stamp duty for properties priced at HK$4 million or below is a flat HK$100, encouraging more active market transactions. Since the government “withdrew cooling measures,” purchasing property via a company only requires paying Ad Valorem Stamp Duty (AVD), offering an advantage over individual purchases.
Purchasing property via a company means holding property in the name of a limited company, which has a separate legal status and can sign agreements, apply for mortgages, and lease property. Unlike direct property purchases, transferring company shares can avoid AVD, requiring only a 0.2% stamp duty on the share transfer.
The main process for purchasing property via a company includes incorporating a company, appointing agents and solicitors, preparing meeting minutes, signing agreements, opening a company account, applying for a mortgage, and finally completing the transaction and taking possession. Advantages include flexible tax handling, reduced transaction taxes, clear ownership, and Profits Tax as low as 8.25%. However, considerations such as mortgage applications, resale profits tax, and annual maintenance costs must be weighed. Professional advice is recommended.
General Accounting has been established for over 20 years, providing company incorporation / ready-made company purchase services (Trust or Company Service Provider License No.: TC002940). If you have any questions regarding procedures for purchasing property via a company, our professional customer service managers can provide a free preliminary company incorporation consultation.
