According to reports, on November 6, Deputy Secretary for Financial Services and the Treasury of Hong Kong, Joseph Chan, stated at a Legislative Council Panel on Financial Affairs meeting that regarding support for the development of the REIT market, the Hong Kong government has successively implemented multiple measures, such as launching a subsidy scheme to support REITs listed in Hong Kong, and exempting stamp duty on the transfer of REIT units since December 2024.
The briefing today on waiving stamp duty on the transfer of non-residential properties by REITs preparing to list is a measure announced in the 2026-27 Budget. The measure takes into account that REITs may need to undergo asset restructuring before listing, which involves considerable stamp duty expenses. Therefore, the aim is to minimize the upfront costs of REIT listing as much as possible and encourage more new REITs to be established in Hong Kong.
Joseph Chan introduced that the main contents of the measure are: (1) It applies to new REITs preparing to list in Hong Kong, including REITs already listed overseas that seek dual primary listing or secondary listing in Hong Kong. Benefiting REITs must be listed on the Hong Kong Stock Exchange within six months after completing the property transfer. (2) Regarding the transfer method, whether the property is transferred directly to the REIT or through the transfer of shares in a special purpose investment vehicle, the stamp duty involved can be waived. (3) To avoid affecting the local residential property market, the proposed stamp duty waiver will not apply to the transfer of residential properties. (4) To prevent abuse, the REIT must hold the property (or shares in the special purpose investment vehicle) for at least two years and must maintain its listing status on the Hong Kong Stock Exchange for at least two years. (5) To encourage REIT issuers to apply for listing early, it is proposed that the stamp duty waiver take effect on the day the government submits the bill to the Legislative Council. Until the Legislative Council passes the bill, stamp duty already paid during the period can be refunded after meeting all eligibility requirements.
Regarding the next steps, Joseph Chan stated that relevant legislative proposals are currently being formulated, with the target of submitting the bill to the Legislative Council in the first half of 2027. The proposed stamp duty waiver is part of the Hong Kong government's "combination punch" to support the development of the REIT market. At the same time, multiple measures continue to be promoted, including striving to implement the inclusion of REITs in Stock Connect as soon as possible to inject growth momentum into the market.
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