Hong Kong Treasury Bureau: The target of providing stamp duty exemptions for real estate investment trusts to be listed will be submitted in the first half of next year

The Zhitong Finance App learned that on November 6, the Deputy Secretary for Financial Services and the Treasury (Hong Kong Treasury), Chan Ho-yi, pointed out at the Legislative Council Committee on Financial Services Committee meeting that in terms of supporting the development of the housing trust fund market, the Hong Kong Government has implemented a number of measures, such as introducing a funding scheme to support the listing of housing trust funds in Hong Kong, and exempting the transfer of housing trust fund units from December 2024. Today's introduction is a measure announced in the 2026-27 Budget to relieve the transfer of non-residential property by housing trust funds preparing to be listed. The measure is to take into account that real estate trust funds may need to carry out asset restructuring before listing, which involves quite a bit of stamp duty expenses. Therefore, we hope to minimize the upfront costs of listing provincial housing trusts and encourage the establishment of more new housing trust funds in Hong Kong.

According to Chan Ho-lim, the main elements of the measures are: (1) It applies to new housing trusts preparing to be listed in Hong Kong, including those that have already been listed overseas and are seeking dual primary listing or secondary listing in Hong Kong. Beneficiary REIT funds must be listed on the Hong Kong Stock Exchange within six months of completing the property transfer.

(2) In terms of transfer methods, whether the property is transferred directly to a housing trust fund or by transferring shares in a special purpose investment instrument, the relevant stamp duty can be exempted.

(3) In order not to affect the local residential property market, the proposed stamp duty relief will not apply to transfers of residential properties.

(4) To prevent misuse, the REIT must hold shares in the property (or special purpose investment instrument) for at least 2 years and maintain a listing status on the Hong Kong Stock Exchange for at least 2 years.

(5) To encourage housing trust fund issuers to apply for listing early, it is recommended that the stamp duty relief take effect on the day the government submits the bill to the Legislative Council. Until the Bill is passed by the Legislative Council, stamp duty paid during that time is refundable after all eligibility requirements have been met.

Regarding the next steps, Chan Ho-lem said that relevant legislative proposals are currently being formulated, with the goal of submitting draft regulations to the Legislative Council in the first half of 2027. The proposed stamp duty relief is part of the Hong Kong Government's “combo punch” to support the development of the housing trust fund market. At the same time, it continues to promote a number of measures, including seeking to implement the integration of housing trust funds into connectivity as soon as possible to inject growth momentum into the market.