Once you have found your dream home and are preparing to make an offer, there are factors that you need to consider and know regarding the costs involved in buying a house in Hong Kong.
How Much Can You Borrow?
If you are a Permanent resident buying your first and only Hong Kong property, you are potentially able to borrow up to 90% of the purchase price. This is made up of 60% guaranteed by the bank and 30% backed up by insurance from the Hong Kong Mortgage Corporation (HKMC). The HKMC will charge you for this additional security (do look at the fee table). Both the bank and the HKMC will look at your earnings, net worth and expenses and have transparent but strict eligibility criteria.
Most banks have a mortgage calculator and property valuation tool and it is worth checking with a couple of banks to see what they think the apartment is worth as it does vary. Please note that banks will lend based on their own valuation and not the final price. So you may be willing to buy a property for 10m because it has been beautifully renovated. However, if the bank has valued it at 5m, you will be able to borrow 90% of 5m and not 90% of what you have paid. Eventually, though, this should level out because you probably will not have to spend on interior work and renovations.
When Do You Pay?
When your offer is accepted and you sign the sale and purchase agreement, you will pay 5% of the purchase price. Another 5% will be due when you sign the full sales contract (usually around a week later) which is also when you will pay the stamp duty. If you are a Permanent Resident, you will pay 3.75% of the total price as Stamp Duty; if you are not, you will pay an astonishing 30%. The deposits and stamp duty are paid to your solicitor. These don’t go to the current owner until the property sale is fully completed and the keys are in your hand (which usually takes around two months).
Source: Sassy Mama Read the Full Article (05 October, 2020 | By Eleanor Coleman)
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