Saving the transaction fee for trading property

Original fact

Mr. A want to invest an property in Hong Kong at the cost of HKD4,000,000. And he would like to resell this property at HKD5,000,000. In the Tax Ordinance in Hong Kong, stamp duty is required for transferring property. And the tax rate is approximate 3% for Hong Kong Citizen and 6% for non Hong Kong Citizen. For the case of Mr. A, if he is HK citizen, he will required to pay HKD150,000 for stamp duty and HKD300,000 if he is not Hong Kong Citizen.

Our suggest arrangement

Mr. A can use a Hong Kong company to own the Hong Kong Property. And during he sold the property, he can just transfer the share of Hong Kong company. The cost of paying stamp duty is be much lower with only 0.1% required as per below:

Benefit of our suggestion

A cost saving for stamp duty for a Hong Kong Citizen will be HKD145,000 and HKD295,000 for non Hong Kong citizen.