Useful Information
 

Hong Kong was a dependent territory of the United Kingdom from 1842 until the transfer of sovereignty to the People's Republic of China in 1997. The Sino-British Joint Declaration and the Basic Law of Hong Kong stipulate that Hong Kong operate with a high degree of autonomy until at least 2047, fifty years after the transfer. Under the policy of "one country, two systems", the Central People's Government is responsible for the territory's defense and foreign affairs, while Hong Kong maintains its own legal system based on English common law, police force, monetary system, customs policy, immigration policy, and delegates to international organisations and events.

   
 

Hong Kong is frequently described as a place where East meets West, a meeting reflected in its economic infrastructure, education and street culture. On one street corner, there may be traditional Chinese shops selling Chinese herbal medicine, Buddhist paraphernalia or bowls of synthetic shark fin soup. But around the next, one may find theatres showing the latest Hollywood blockbuster, an English-style pub, a Catholic Church or Ronald McDonald inviting passers-by to a Big Mac. The territory's official languages are Chinese and English; signs in both languages are omnipresent throughout Hong Kong. The government, police and most workplaces and stores conduct business bilingually. British rule may have ended a decade ago but Western culture is deeply ingrained in Hong Kong and coexists seamlessly with traditional philosophy and practices of the Orient.

Hong Kong has an active nightlife in major entertainment districts Lan Kwai Fong, Tsim Sha Tsui, Wan Chai, etc. These areas are frequented by visitors, expatriates and locals alike. On a clear day, Victoria Peak offers a spectacular view of the city. There is also a promenade along the Tsim Sha Tsui waterfront, which is popular among young Chinese couples. Shopping is often done at night as evident in the Temple Street Night Market where one can also catch free performances of Peking opera.

   
 

Hong Kong's climate is subtropical and prone to monsoons. It is cooler and dry in the wintertime which lasts from around December to early March, and is hot, humid and rainy from spring through summer. It is warm, sunny, and dry in autumn. Hong Kong occasionally has tropical cyclones in the summer and early autumn. The ecology of Hong Kong is mostly affected by the results of climatic changes. Hong Kong's climate is seasonal due to the alternating wind directions between winter and summer. Hong Kong has been geologically stable for millions of years, though landslides are common especially after heavy rainstorms. Flora and fauna in Hong Kong are altered by climatic change, sea level alternation and human impact.

The highest recorded temperature[13] in Hong Kong is 38C (98.0F) while the lowest recorded temperature is -4C (25.0F). The average temperature[14] in the coldest month, January, is 16.1C (61.0F) while the average temperature in the hottest month, July, is 28.7C (83.7F). The territory is situated south of the Tropic of Cancer which is approximate to Hawaii in latitude. In winter, strong and cold winds generate from the north cool the city; in the summer, the wind's prevailing direction changes and brings the warm and humid air in from the southwest. This climate can support a tropical rainforest.

 
 

Hong Kong maintains a highly capitalist economy built on a policy of free market, low taxation and government non-intervention. It is an important centre for international finance and trade, with the greatest concentration of corporate headquarters in the Asia-Pacific region. In terms of gross domestic product per capita and gross metropolitan product, Hong Kong is the wealthiest urban centre in the People's Republic of China. The GDP per capita (PPP) of Hong Kong even exceeded the four big economies in Western Europe (UK, France, Germany, Italy) and Japan in Asia.

Continuing the practice established under the British administration, the Government of Hong Kong mostly leaves the direction of the economy to market forces and the private sector. Since 1980, the government has generally played a passive role under the official policy of positive non-interventionism. Hong Kong has often been cited as a prime example of laissez-faire capitalism in practice, most notably by economist Milton Friedman. It has ranked as the world's freest economy in the Index of Economic Freedom for 13 consecutive years, since the inception of the index in 1995.

   
 

Renting in HK

It is the Government's policy to provide public rental housing to families in genuine need who cannot afford private rental accommodation. The public rental housing programme is a major social achievement. At the end of 2005, about 2.13 million people lived in public rental housing estates managed by the Hong Kong Housing Authority (HKHA) and the Hong Kong Housing Society (HKHS). The stock at that time was 720 300 flats. Public housing tenants pay, on average, 53 per cent of the assessed market rent for the flats in which they live. Subsidised Home Ownership As at end-2005, 433 000 subsidised sale flats had been sold to households of eligible families/persons at discounted prices under the Government's various subsidised home ownership schemes. Among these were the Home Ownership Scheme (HOS), the Private Sector Participation Scheme (PSPS) and the Tenants Purchase Scheme (TPS) under the HKHA. In support of the Government's efforts to consolidate its housing policies and to minimise intervention in the property market, the HKHA has ceased the production and sale of HOS and PSPS flats, terminated the Home Assistance Loan Scheme and identified means of disposal for the surplus subsidised sale flats. The sale of public rental housing units under the TPS will also be halted after Phase 6. Private Housing Market The Government recognises the importance of the property sector to the economy and the community. Its policy is to allow the private housing market to operate as freely as possible. The Government believes that the amount of private housing production should be a matter for the market to decide. The best way to stabilise property prices is to maintain a free and stable environment for the market to operate and minimise government intervention.

Renting a Property in Hong Kong

Most properties are leased out in good decorative condition, unfurnished, and often but not always provided with appliances which may include cookers, refrigerators, washing and drying machines, dishwashers and air-conditioners, but excluding soft furnishings such as carpets and curtains. Except for serviced apartments, there are far fewer furnished apartments available, and these few are usually smaller units with only one or two bedrooms.

Air-conditioners are essential for comfortable living during the summer months and, if not provided by the Landlord, will need to be installed by the tenant.

There are also serviced apartments available offering good to excellent facilities for short lease periods of three months or longer. The rentals for these units are comparatively higher. Most have one or two bedrooms although some three bedroom units are available.
   
 

Rental

Rentals are in Hong Kong dollars payable monthly in advance and, except for serviced apartments, are usually exclusive of monthly management fees and Government rates, for which an additional 12% to 15% of the rent should be budgeted.

Deposits

These are usually equivalent to two, occasionally three, months' rental and are payable to the landlord when an offer to lease is accepted. They are mostly refundable in full should the Tenancy Agreement not be signed. Once the Tenancy Agreement is signed, the deposit is held by the Landlord without interest, and refunded to the tenant upon expiration of the lease. The cost of any damage or reinstatement work necessary to the apartment, other than fair wear and tear, will be deducted from the deposit before repayment. Tenancy Agreement Most tenancy agreements in Hong Kong are for a two year period, although it is often possible to have an escape clause that gives the tenant the right to break the tenancy on giving 2 or 3 months' notice to the landlord after a minimum occupation period of 12 to 15 months.

By law, the tenant has the right of first option to renew the tenancy after each two-year period, at the current market price.

Rates & Government Rent

Rates are a form of property tax on leased accommodation, assessed by and payable to Government at approximately 5.5% of the approximate annual rental value. In addition, properties in some districts (part of the New Territories and outlying islands) are subject to Government land rent, which is calculated at 3% of the rateable value. These charges are payable quarterly in advance by the tenant.

 

Government Stamp Duty

A form of Government tax payable on all Tenancy Agreements and usually payable by the tenant and Landlord in equal shares. The total amount payable on a two-year lease is 0.5% of the annual rent plus $5, or 0.25% of the annual rent plus $5 for a one-year lease (uncommon except for serviced apartments).

Management Fee

These fees, payable by all occupants, provide for communal services such as security guards, cleaning and maintenance of common areas and amenities. The amount varies according to the age and number of units in a building and the type of amenities or quality of services provided.

Legal Fee

The Tenancy Agreement is usually provided by the Landlord or his solicitor (lawyer) with an initial draft for the tenant's approval. The tenant may use a solicitor to review the lease at his discretion. Each party is responsible for their own legal fees. Agency Fee An introductory fee of half of one month's rental is payable by the tenant. In accordance with local practice, the agent may also accept a fee from a third party such as the Landlord or Landlord's agent. Package details available to corporations on request. Utilities Except for serviced apartments, it is the tenant's obligation to arrange for connection of utilities such as gas, electricity and telephone/fax lines. A deposit or connection fee is payable to each provider, roughly equivalent to two months' estimated usage, refundable on termination of the service.

   
 

Buying a Property in Hong Kong

Hong Kong is unique in that all land belongs to the government; those who buy property in Hong Kong actually buy an agreement or a lease with the longest leases available being for 999 years. According to the laws governing the real estate sector theoretically anyone is entitled to own property in Hong Kong whether as an individual or through a company structure. If a company wishes to purchase a lease on property and conduct business in Hong Kong they have to be registered at Hong Kong's Companies Registry. 

According to the Land Registration Ordinance all leases should be listed at Hong Kong's Land Registry office and searches can be conducted there for a small fee; however it is still important for a property buyer to have their lawyer conduct detailed title deed searches to ensure all is in order with the property being offered for sale.

The first stage in the property buying process in Hong Kong is to find a lawyer and an estate agent to assist. Estate agents generally charge a fee of 1% of a property's value to both the vendor and the purchaser if a sale proceeds to closure and a solicitor's fees are regulated by the Solicitors' Costs Rules, however it is still possible to negotiate a complete fee for the work they will do on your behalf and this is the normal way of doing business.

Once the property investor has found an estate agent to assist them they should detail their specific criteria and then view real estate that matches their brief. If a mortgage will be required to make the purchase this should be agreed in principal - there are a number of banks in Hong Kong willing and able to lend money to overseas property buyers although there is a general reluctance to lend money on older properties. Mortgages are also listed at the Land Registry office therefore it's possible for the purchaser's solicitor to find out whether the property being sold already has a mortgage against it and if it does, under the terms of the contract a specification will be made that the mortgage will be paid off by the vendor as a condition to the conclusion of the sale.

Once a suitable investment property has been found and the asking price agreed upon it's usual to sign a binding pre-contract and pay a non-refundable deposit therefore before doing so the investor should speak to their solicitor and take advice to avoid the loss of any money. Once the pre-contract has been signed the buyer's solicitor will begin his searches and the vendor's solicitor will draw up the Sale and Purchase Agreement which has to be approved by the buyer's solicitor. Once this document has been approved and the searches of the Land and Companies Registries have been concluded satisfactorily the Agreement will be signed and the purchase deed will be drawn up by the investor's solicitor. This has to be approved by the vendor's solicitor before it is signed by all parties and the money is released by the bank.

As soon as this agreement is signed the buyer becomes responsible for the property in Hong Kojng in terms of needing to insure it and it is often a stipulation of any mortgage to purchase that insurances are in place before the money is actually released to the vendor.

Finally, there are quite a few taxes, fees and charges that may be payable during a property transaction in Hong Kong and as a number of these change annually it's wise to ask for a detailed breakdown of likely costs from an estate agent before committing to buy property in Hong Kong.

The list of fees payable will likely include all or some of the following:- 

Estate agency fees - 1% of the property's value
Solicitor's fees - fixed by the Law Society of Hong Kong's Solicitors' Costs Rules but usually negotiable Stamp duty - around 3% of the property's value
Search costs
Land registration costs
Insurance
Quarterly rates
Property tax or profits tax
Mortgage arrangement fees
Property management fees