Most Read Contributor in Hong Kong, September 2016
After six months of consultations with interested
organisations/individuals and deliberations by the Bills Committee
of the Legislative Council, the Stamp Duty (Amendment) Ordinance
2011 ("Amendment Ordinance") was finally passed by the
Legislative Council and gazetted on 30 June 2011. Apart from the
obvious implications, the legislation creates unforeseen
consequences which developers, banks, vendors and purchasers of
residential properties must note.
Some effects of the Amendment Ordinance are highlighted
The cancellation of deferment of payment of stamp duty for
residential property priced at or below HK$20 million will take
effect immediately upon the date of gazette of the Amendment
Ordinance, i.e. 30 June 2011. In other words, there will be no more
deferral of payment of stamp duty for chargeable agreements for
sale executed on or after 30 June 2011.
Additional SSD may be demanded by the Collector of Stamp
Revenue ("Collector") on a future date due to the
inadequacy of the consideration stated in the agreement for sale
and purchase and yet the vendor and the purchaser are made jointly
and severally liable for any additional SSD. By that time, it is
unlikely that the purchaser will be able to procure payment of the
additional SSD by the vendor. The potential liability of additional
SSD may also affect title to the property, and hence affect a
SSD is imposed on disposal of a unit after a transfer from a
relative. This has no speculation element. It is an unforeseen
consequence of the legislation and would affect disposition of
property under a normal family arrangement situation.
Although the Stamp Duty Ordinance (Cap.117) ("SDO")
will exempt the usual ad valorem stamp duty, as well as SSD, for
intra-group associated companies transfers under Sections 45 and
29H(3) of the SDO, the date of "acquisition" of the
property for SSD purposes will be recounted from the date of the
intra-group transfer to the transferee instead of the original date
of the acquisition by the transferor.
SSD is imposed on a developer who acquires a bare site and
instead of building on it, sells/transfers the bare site to another
developer within 24 months. This is so even though the
first-mentioned developer may be selling the bare site, not due to
speculation, but due to insufficient capital for the development.
The additional cost of SSD incurred will inevitably be transferred
Whilst a developer who acquires a site and then sells newly
built flats may be exempted from SSD, a developer who acquires an
old residential building for renovation (without demolishing the
old building) may be liable to SSD if it resells the renovated
residential units within 24 months.
There is no appeal mechanism in the Amendment Ordinance on the
applicability of SSD on a case by case basis in the light of
individual or personal circumstances such as financial hardship,
bereavement, serious sickness, etc.
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This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications
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The process for obtaining planning permission for development of property in the Cayman Islands has been updated as a result of the latest revision of the Development and Planning Law and accompanying regulations (July 2015).
In principle, when the parties agree to arbitrate, they shall be
bound by that agreement. It should therefore follow that when a
party initiates arbitration proceedings, the other party - the
respondent – will avail itself of the opportunity to present
its case and participate in the proceedings.
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