Hong Kong proposed waiving stamp duty on transfers of nonresidential property into new Real Estate Investment Trusts (REITs) seeking to list on its stock exchange, with the legislative amendment bill expected in the first half of 2027.
The Hong Kong Special Administrative Region (HKSAR) government has proposed a stamp duty waiver on the transfer of nonresidential immovable property and qualifying shares in property-holding special purpose vehicles (SPVs) into new REITs seeking to list in Hong Kong.
The proposal, announced following the 2026–27 Budget and the 2026 Policy Address, was presented to the Legislative Council Panel on Financial Affairs on 6 November 2026. The government plans to introduce the relevant bill in the first half of 2027.
The measure aims to reduce upfront asset restructuring costs and encourage new REIT listings in Hong Kong. Under existing rules, transfers of nonresidential property attract stamp duty of up to 4.25%, while transfers of HKSAR stock are subject to a 0.2% rate.
Eligible REITs and assets
The proposed waiver would cover only new REITs seeking an initial listing on the Stock Exchange of Hong Kong (SEHK), including those pursuing dual-primary or secondary listings. Existing listed REITs and property transfers into REITs after listing would not qualify.
Eligible transfers would include:
- Nonresidential immovable property located in Hong Kong.
- Shares in SPVs that qualify as HKSAR stock, provided at least 95% of their asset value comprises nonresidential property.
Transfers of residential property would remain subject to existing stamp duty rules.
Listing and holding conditions
Eligible REITs would have to complete their Hong Kong listing within six months of the property assignment or SPV share transfer. An extension could be granted in exceptional circumstances.
The REIT would also have to remain listed for at least two years. The transferred property or SPV shares must be held on the date of the REIT’s first listing and retained for at least two years from the transfer date.
If the REIT disposes of the assets, becomes delisted or faces a prolonged suspension of trading within two years of listing, it would have to repay the waived stamp duty.
Safeguards and transitional arrangements
The proposal includes measures to secure the recovery of stamp duty if eligibility conditions are breached. A statutory charge would be imposed on transferred nonresidential property, while security would be required for transfers involving SPV shares. Eligible REITs could apply to release the charge or security after meeting all conditions.
Under a transitional arrangement, stamp duty paid on qualifying transfers between the introduction of the bill and its enactment could be refunded once the REIT had remained listed for two years and satisfied the eligibility requirements.
The proposed waiver is intended to strengthen Hong Kong’s REIT market by lowering the costs of bringing new property investment vehicles to the stock exchange.
