Stamp Duty on Tenancy Agreements in Hong Kong
Published: 2026-04-21
This article reflects Hong Kong law as at 21 April 2026. Tenancy stamp duty rates have historically been stable, but the specific calculation and procedural details should be confirmed against the Inland Revenue Department (Stamp Office) official website.
Introduction
When a tenancy is signed in Hong Kong, both landlord and tenant are liable for stamp duty on the agreement. Stamp duty is a tax levied by the Government on residential and non-residential tenancies and administered by the Stamp Office of the Inland Revenue Department. Compared with Ad Valorem Stamp Duty (AVD) on property purchases, tenancy stamp duty is at lower rates and simpler in structure — but if payment is delayed, surcharges can reach ten times the original duty, and the unstamped agreement is inadmissible in court, weakening each party's position in any dispute.
This article describes, in general terms, the three rate bands, the calculation mechanics, who pays, when and how to pay, and the consequences of late or missed payment.
The Three Rate Bands (by Term)
Tenancy stamp duty rates depend on the length of the tenancy:
| Tenancy term | Rate |
|---|---|
| Not exceeding 1 year | 0.25% of the total rent |
| More than 1 year but not exceeding 3 years | 0.5% of the annual or average annual rent |
| Exceeding 3 years | 1% of the annual or average annual rent |
Additional charges:
- Counterparts — HK$5 per counterpart. Hong Kong practice is that landlord and tenant each hold one counterpart, so typically an additional HK$5 to HK$10 in duty.
- Key money / construction fee — if the tenancy includes such amounts, chargeable at the property Scale 2 rates (as at April 2026, 4.25%).
- Rental deposit — excluded from the calculation base.
Calculation Examples (Conceptual)
Example 1 — monthly rent HK$20,000, 1-year fixed tenancy:
Total rent = HK$20,000 × 12 = HK$240,000
Rate = 0.25%
Stamp duty = HK$240,000 × 0.25% = HK$600 (plus HK$5 per counterpart)
Example 2 — monthly rent HK$20,000, 2-year fixed tenancy:
Annual rent = HK$240,000
Rate = 0.5%
Stamp duty = HK$240,000 × 0.5% = HK$1,200 per year × 2 years = HK$2,400 (plus counterpart fees)
Example 3 — 1-year tenancy with a rent-free period: if 1 month rent-free, the calculation base is the actual total rent payable. The annual rent used is averaged across the actually-charged months.
Example 4 — multi-year tenancy with annual rent increases: calculated on the average annual rent across the term.
Annual and total rent figures are rounded up to the nearest HK$100. Calculated duty is rounded up to the nearest HK$1.
Who Pays — and Market Practice
By law: Under the Stamp Duty Ordinance, the landlord, the tenant, and any other party signing the tenancy are jointly and severally liable for the duty. The Stamp Office may pursue any party for the full amount.
Market practice: In residential tenancies, landlord and tenant each bear half (50/50 split) is the most common convention. The agreement may allocate differently — fully to the landlord, fully to the tenant, or in specific proportions. Specifying the allocation expressly in the contract helps avoid disputes later.
When to Pay
Within 30 days of signing — 30 calendar days from the date of the agreement. This is statutory. Holidays or the parties being out of Hong Kong do not extend the deadline.
How to Pay
Payment methods:
- Online (e-Stamping). Either landlord or tenant can submit and pay through their eTAX account. The fastest route.
- Through a letting agent. Where the tenancy is arranged through an estate agent, the agent usually handles the stamping process (some charge a service fee, others include it in commission).
- At the Stamp Office. In-person submission of the agreement counterparts and payment.
- By post. Mail the agreement counterparts and a cheque to the Stamp Office. The Stamp Office returns a stamp certificate by post.
Once stamped, a stamp certificate has the same legal status as a conventional stamp. A properly stamped agreement is admissible in court and can support RVD filings (Form AR2) for SDU tenancy regulation where applicable.
Consequences of Late Payment
If not paid within 30 days, the Stamp Office applies surcharges based on the length of delay:
| Delay | Surcharge (multiple of original duty) |
|---|---|
| Not exceeding 1 month late | 2× original duty |
| More than 1 month but not exceeding 2 months late | 4× original duty |
| More than 2 months late | 10× original duty |
For example, original duty of HK$600, more than 2 months late → surcharge HK$6,000 → total payable HK$6,600.
Other consequences:
- An unstamped tenancy is inadmissible as evidence. The Lands Tribunal and other courts will not consider an unstamped agreement. A party needing to litigate on the contract must first pay the duty and any surcharge before the contract can be used.
- SDU regulation issues. An unstamped tenancy may complicate the AR2 notice of tenancy submission to the RVD.
- Stamp Office recovery. The Stamp Office can pursue recovery of duty and surcharges through civil proceedings.
Practical Points
- Who handles the administration. Although liability is joint, in practice one party (typically the landlord, who is holding the deposit) handles the whole process and the parties share the cost afterwards — this is the most common arrangement. The agreement should say clearly who is responsible for the mechanics, so it doesn't fall between two parties each assuming the other will do it.
- Supplemental and amending agreements. If the tenancy is amended or supplemented later (extending the term, adjusting the rent), the supplemental agreement itself is separately liable to stamp duty.
- Counterparts matter. Hong Kong market practice is that both landlord and tenant each hold a stamped counterpart. A tenant without their own stamped copy is at risk in any dispute — it is difficult to prove the tenancy's terms.
- SDU AR2 notice. For SDU tenancies under LTCO Part IVA regulation, the landlord must submit a Form AR2 to the RVD within 60 days of the tenancy commencing. This is an obligation separate from stamp duty, and both must be handled.