Question

M plans to purchase an apartment at HKD 4,200,000 and asks for a 60% mortgage loan from a bank. He is a Hong Kong Permanent Resident, who does not own any other residential property in HK at the moment and acts on his own behalf in the transaction. How much cash should he at least prepare to close the deal? Show the detailed calculations and make your own assumptions when needed. For the stamp duty rates, please refer to the following table.

Stamp Duty Rates
Amount or Value of Consideration Duty Payable
$1 - $2,000,000 $100
$2,000,001 - $2,351,760 $100 + [(consideration - $2,000,000) x 10%]
$2,351,761 - $3,000,000 Consideration x 1.5%
$3,000,001 - $3,290,320 $45,000 + [(consideration - $3,000,000) x 10%]
$3,290,321 - $4,000,000 Consideration x 2.25%
$4,000,001 - $4,428,570 $90,000 + [(consideration - $4,000,000) x 10%]
$4,428,571 - $6,000,000 Consideration x 3%
$6,000,001 - $6,720,000 $180,000 + [(consideration - $6,000,000) x 10%]
$6,720,001 - $20,000,000 Consideration x 3.75%
$20,000,001 - $21,739,120 $750,000 + [(consideration - $20,000,000) x 10%]
$21,739,121 and above Consideration x 4.25%

Answer 1

Amount to be paid to Buy the Apartment (In HKD) = 4,200,000

Amount to be paid for Stamp Duty (In HKD) = 110,000

(Since the value of consideration falls within the range of 4,000,001 - 44,28,570, the stamp duty value will be

90000 +(4,200,000-4,000,000)*10%)

Since M is asking for 60% of the amount from bank as Mortgage Loan that means he has prepare the remaining 40% in cash.

Now there are Two answers:

1. If bank provides loan on Stamp duty amount as well, then cash to prepare will be = 40%*(4,200,000+110,000)

HKD 1,724,000

2. If bank does not provides loan on Stamp duty amount as well, then cash to prepare will be = 40%*(4,200,000)+110,000

HKD 1790000