B. Stamping Procedures

B. Stamping Procedures 

1. General
    
   1. Tenancy agreement, agreement for tenancy and any other document of similar effect (including their duplicate) (hereinafter called “tenancy agreement”) are chargeable with stamp duty.
   
   
   2. The landlord, tenant and any other persons signing the tenancy agreement are liable for the payment of stamp duty.
   
   
   3. A tenancy agreement has to be stamped within 30 days from the date of its signing. Late stamping will incur a penalty of up to a maximum of 10 times of the original amount of stamp duty.


2. Consequences of not stamping a tenancy agreement
    
   1. An unstamped tenancy agreement shall not be admitted as evidence in civil proceedings, which means a party cannot enforce an unstamped tenancy agreement even if the other party is in breach of the unstamped tenancy agreement.
   
   
   2. An unstamped agreement cannot be registered, filed or acted upon by any public officer.
   
   
   3. The Collector of Stamp Revenue may take civil action to claim any outstanding stamp duty from the landlord and the tenant who are responsible for stamping the tenancy agreement.


3. Methods of stamping
   
   You may choose one of the following three methods to stamp a tenancy agreement: 
    
   1. Via the Internet 
       
      1. The most convenient way is to submit a stamping application via the Internet at the GovHK. This is a 24-hour service and you do not need to present the original tenancy agreement to the Stamp Office.
      
      
      2. Before submitting a stamping application via the Internet, online authentication is required for users of e-Stamping service. Users of e-Stamping service can authenticate by one of the following means:
         1. E-Stamp Account;
         2. Taxpayer Identification Number and password; or
         3. Digital Certificate issued by Hongkong Post or the Digi-Sign Certification Services Ltd.
      
      
      3. To submit a stamping application via the Internet, the procedures are as follows:
         1. Visit the e-Stamping Service.
         2. Click onto the “Login e-Stamping now”.
         3. Select “Tenancy Agreement” under the “Submit Stamping Application”.
         4. For business users, you may use E-Stamp Account or recognized digital certificate for authentication. For individual users, you may use eTax Account or recognized digital certificate for authentication.
         5. Read the instruction notes and input application details.
         6. Pay online by PPS, VISA or MasterCard. Alternatively, you may print the payment notice and pay the duty via existing tax payment channels.
         7. Finally, print the stamp certificate according to the instructions and attach it to the tenancy agreement.
      
      
      4. A stamp certificate has the same legal status as a conventional stamp.
   
   
   2. By Post 
       
      1. You may submit a stamping request in paper form [IRSD111(E)] by post to The Stamp Office at P.O. Box No. 28827, Gloucester Road Post Office, Wan Chai, Hong Kong. The form can be obtained at http://www.ird.gov.hk/eng/pdf/irsd111.pdf or from the Stamp Office. You do not need to attach the original tenancy agreement.
      
      
      2. If the tenancy agreement is one containing the usual terms, you can calculate the stamp duty payable and attach the payment cheque to the application form. The cheque should be made payable to “The Government of the Hong Kong Special Administrative Region” or “The Government of the HKSAR” and crossed. No cash or post-dated cheques will be accepted.
      
      
      3. The Stamp Office will send you a stamp certificate by post within 5 working days after receipt of your payment. A stamp certificate has the same legal status as a conventional stamp.
   
   
   3. In person at the Stamp Office 
       
      1. You may visit the Stamp Office and present the original tenancy agreement for stamping over the counters. You may pay by cash or cheque.
      
      
      2. The address and service hours of the Stamp Office are as follows:
          

         Address: 3/F, Revenue Tower, 5 Gloucester Road, Wan Chai, Hong Kong  (Please visit http://www.ird.gov.hk/eng/cu_ol.htm for directions)
         Monday to Friday	8:45 a.m. to 5:00 p.m. (no lunch break)
         Saturday, Sunday and Public Holidays	Closed

         
         # Note: The above addresses and opening hours are for reference only. Please verify the addresses and opening hours with the relevant department and website.
          
      
       
4. Calculation of stamp duty
    
   1. Stamp duty on tenancy agreements is calculated at rates which vary with the term of the tenancy as follows: 
       

      Term	Stamp Duty Rate1
      a. Not defined or is uncertain	0.25% of the yearly or average yearly rent2
      b. Does not exceed 1 year	0.25% of the total rent payable over the term of the tenancy agreement2
      c. Exceeds 1 year but not exceeding 3 years	0.5% of the yearly or average yearly rent2
      d. Exceeds 3 years	1% of the yearly or average yearly rent2
      e. Key money, construction fee, etc. mentioned in the tenancy agreement	4.25% of the consideration if rent is also payable under the tenancy agreement. Otherwise, same duty as for a sale of immovable property
      f. Duplicate or counterpart	$5 each
      1 Where the stamp duty calculated includes a fraction of $1, round-up the duty to the nearest $1.  2 The yearly rent, average yearly rent and total rent has to be rounded-up to the nearest $100. Rental deposit mentioned in the tenancy agreement will not be taken into account when computing stamp duty.

   
   
   2. To determine the term of a tenancy agreement: 
       
      1. Both the commencement date and the cessation date will be counted. 
         
         E.g. if the tenancy agreement commences on 1 January 2017 and terminates on 31 December 2017. It is a term of 1 year, and falls under the category of “does not exceed 1 year”. 
         
         E.g. if the tenancy agreement commences on 1 January 2017 and terminates on 1 January 2018. It is a term of 1 year and 1 day, and falls under the category of “exceeds 1 year but not exceeding 3 years”.
      
      
      2. A tenancy agreement for a fixed term and thereafter until determined or one with a fixed term and an option to review is both treated as a tenancy agreement for that fixed term. 
         
         E.g. if the tenancy agreement has a term of 2 years together with an option to renew for another 2 years. It is treated as a term of 2 years, and falls under the category of “exceeds 1 year but not exceeding 3 years”.
      
      
      3. A tenancy agreement for a fixed term but terminable upon an earlier event is treated as a tenancy for that fixed term. 
         
         E.g. if the tenancy agreement has a term of 4 years with a right for the tenant to terminate at the end of the 2nd year. It is treated as a term of 4 years, and falls under the category of “exceeds 3 years”.
          
      
       
5. Late Stamping
    
   1. You may be subject to the payment of penalty in cases of late stamping or omission as follows: 
       

      Stamping Delay	Penalty
      Not exceeding 1 month	2 times the amount of stamp duty
      Exceeding 1 month but not exceeding 2 months	4 times the amount of stamp duty
      Any other case	10 times the amount of stamp duty

   
   
   2. You may lodge a request for remission of penalty by filling in the Application form for Remission of Penalty for Late Stamping with explanations of the delay and supporting evidence. The Application form can be obtained at https://www.ird.gov.hk/eng/pdf/irsd127.pdf or from the Stamp Office. Subject to the individual circumstances of each case, the Collector of Stamp Revenue may remit partly or wholly the penalty payable.
      
       
   3. The Inland Revenue Department (IRD) has developed a simple stamp duty computation program to assist the public to calculate the stamp duty payable on tenancy agreements. The program is available at the IRD's website at https://www.ird.gov.hk/eng/ese/sd_comp/sdta.htm.