Intellectual Property Law

Hong Kong Property Stamping System

By IBLS Editor

Stamp Certificates issued by the Hong Kong Collector of Stamp Revenue have the same legal status as conventional stamps on instruments. Safety features of the system include deep encryption to insure data security and secrecy in the course of transmission. The Stamp Duty (Amendment) Ordinance of 2003 (Cap. 117) introduced this electronic mode of stamping, was passed by the Hong Kong Legislative Council in June, 2003, and went into effect August 2, 2004. The service has been re-provisioned under the eTAX department of GovHK, as of January 2008.

E-Stamps are official state-sanctioned documents, created over the Internet to memorialize property contracts. These are the most common ones: initial stamping of transaction agreement/assignment involving less than 4 purchasers; subsequent agreement/assignment; and tenancy agreement for rental. E-Stamps are safe or even safer than traditional stamping. The system uses these safeguards to insure reliability and avoid fraud: encryption within the GovHK website network, and end-to-end encryption methodology that uses Secure Sockets Layer (SSL) and Public Key Infrastructure (PKI). The authentication scheme uses traditional digital certificates; and pre-registered accounts are identified by a taxpayer identification number and E-Stamp account number with password control. The entire system is bolstered by a resilient and ultra-safe government computer infrastructure that uses a separate cluster of midrange servers with high availability and fault-resilient features like dual network cards and mirrored disks. Finally, there is System Security Control with advanced security devices against hacker attack using access control features that is overseen and checked by regular security assessment and audit. Under this electronic system, an instrument is properly stamped if a stamp certificate is issued. A stamp certificate has the same legal status as a conventional stamp.

A property owner may still use the traditional paper form and stamp. But there are many reasons to switch over to the new systems. Reasons to switch to the electronic stamping include: the transaction enters the computer system immediately; Services are available anytime and anywhere with Internet connection, 24/7; stamping of urgent cases can be conducted immediately without wait; a stamp can be applied even if the original document is not readily available; late penalties can be avoided; savings of time, gas, costs and the frustrations of standing in line; removing the risk of loss or damage of original documents during processing or delivery; flexible payment methods are available; The computer interface is user-friendly; user accounts save general information and allow the saving of all data for easy access, and faster service; and, partial forms can be saved online.

For the sale or transfer of immovable property in Hong Kong, rates are as follows:

-under $2,000,000, stamp rate: $100;

- from $2,000,000-- $2,351,760, stamp rate: $100 + 10% of excess over $2,000,000;

-from $2,351,760-- $3,000,000, stamp rate: 1.5%;

-from $3,000,000-- $3,290,320, stamp rate: $45,000 + 10% of excess over $3,000,000;

- from $3,290,320-- $4,000,000, stamp rate: 2.25%;

-from $4,000,000-- $4,428,570, stamp rate: $90,000 + 10% of excess over $4,000,000;

- from $4,428,570-- $6,000,000, stamp rate: 3%;

-from $6,000,000-- $6,720,000, stamp rate: $180,000 + 10% of excess over $6,000,000;

- over $6,720,000, stamp rate: 3.75%.

Full post as published by IBLS Internet Law Blog on November 17, 2008 (boomark / email).