Fees, Government Charges and Utilities
The tenant will need to be prepared to pay a number of costs applicable to finding a home in Hong Kong, and these are detailed below. Most are payable in advance or quite quickly after choosing where you will live. As a rule of thumb, it is recommended that you arrange to have funds available in advance in Hong Kong for this purpose equivalent to at least four times your budgeted monthly rental, preferably five or even six.
Management Fees
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.
Rates and Government Rent
Rates are a form of property tax on leased accommodation, assessed by and payable to Government at 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.
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.
Legal Fees
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.
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).
Agency Fees
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.
Copyright © 2008-2021 Hongkong Select Homes