In recent years, an increasing number of Hong Kong residents have invested in properties in Mainland China and overseas. Since the regulatory regimes and taxation systems of other locations are different from Hong Kong, consumers must be aware of the possible risks involved in purchasing properties outside Hong Kong (especially uncompleted ones) in order to protect themselves from loss. In this regard, the Estate Agents Authority (“EAA”) will organise a public seminar in Cantonese titled “Know the risk when purchasing properties situated outside Hong Kong” on 30 March, to introduce to consumers the important points-to-note when purchasing non-local properties. All are welcome to attend and please register at this website: https://eaa.ievent.hk
On the subject of purchasing non-local properties, I would like to remind the public of certain important points to note. Firstly, if a consumer purchases a non-local property through an agent who only engages in handling properties outside Hong Kong, under the existing law, the agent shall be exempted from the requirement of obtaining a licence from the EAA. Hence, as the agent is “unlicensed”, the EAA will not be able to provide assistance in case of disputes, as opposed to licensed estate agents, where the EAA can follow up on their misconduct in the sale of non-local properties.
In addition to appointing a licensed estate agent, consumers are also advised to do their homework when purchasing non-local properties to better protect themselves. For example, as legal procedures for property transactions vary in different locations, consumers are advised to seek local legal advice to understand the legal and operational procedures and restrictions on foreign purchasers on property buying, selling, or leasing, and whether common law or local law will be exercised in case of litigation, so that their own interests will be better protected.
Furthermore, as taxation systems vary from place to place, the types of taxes for buying, selling or leasing of property will also vary. In particular, the calculation of tax for foreign purchasers may be different from the local’s, which could affect the return on investment. For example, when purchasing a residential property in the United Kingdom, what kind of taxes should one be aware of? To help non-resident individuals investing in UK residential properties understand better the main taxes which may be levied on them, Her Majesty’s Revenue and Customs issued a guidance note for estate agents in Hong Kong. Interested parties may read the note by clicking here.
Lastly, I suggest consumers who are interested in investing in non-local properties to check out the reference information in a new page under the “Smart advice” section of this website.
Chief Executive Officer
Estate Agents Authority