Guide For Leasing A Property
Interactive Guide | Hong Kong | 23 pages
Guide for Leasing a Property 2020 Hong Kong GUIDE FOR LEASING A PROPERTY IN HONG KONG 1
Contents Leasing in Hong Kong 3 Leasing Process 4 Leasing Cost 7 Neighbourhood Guide 8 Neighbourhood Map 16 Neighbourhood Map - Hong Kong Island 17 Neighbourhood Map - Kowloon and New Territories 18 Tips for Tenants 19 At a Glance 20 Why Knight Frank? 22 Meet the Team 23 2 GUIDE FOR LEASING A PROPERTY IN HONG KONG
Leasing in As an international financial centre, Hong Kong’s residential market offers Hong Kong attracts a large number of a variety of lifestyle options ranging Hong Kong expatriates to live and work here every from city living to suburban living; and year. However, limited land supply and a selection of housing types from large housing demand have resulted high-rise apartments to townhouses in high rents and prices of residential to village homes. properties. A standard lease in Hong Kong is Traditional luxury residential districts usually for two years, although often a are concentrated on Hong Kong Island, break clause gives the landlord and/ in neighbourhoods such as the Peak, or tenant the right to terminate after Island South and Mid-Levels. Most 12 months with a 2-3 months’ written residential properties in Hong Kong notice period. In today’s market, are supported by shops and amenities. tenants tend to ask for an inclusive With a comprehensive transportation package which means the monthly network, these neighbourhoods are rental is inclusive of management fees conveniently connected to central and Government Rates. business districts and shopping areas in the city. GUIDE FOR LEASING A PROPERTY IN HONG KONG 3
Leasing Process The process of leasing property in Hong Kong is simple and straightforward, but you will still need a reputable, reliable and experienced estate agent. Identify property and negotiate leasing terms with landlord. Upon agreement of lease, tenant’s agent should check land record to verify owner identity and see if the property is mortgaged. Check for any illegal structures and building or slope orders. Landlord and tenant to sign provisional TA. Tenant to pay one month’s rent as holding deposit. Solicitor or agent to prepare formal TA. Landlord and tenant to sign formal TA and tenant to pay 2-3 months’ rents as security deposit. Landlord and tenant to pay Stamp Duty in equal shares within one month from signing formal TA. Landlord to register the lease at Land Registry. Tenant will need to pay the agent (and the solicitor if applicable). 4 GUIDE FOR LEASING A PROPERTY IN HONG KONG
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Leasing Costs Stamp Duty Stamp duty is a one-off tax payable to Hong Kong’s Inland Revenue Department. The norm in Hong Kong is for both the tenant and landlord to pay the stamp duty fees in equal proportion. This is required in order for the agreement to be enforceable at law by the landlord for arrears rent etc and registered with the Land Registry. Lease Duration Stamp Duty Rate Not defined or uncertain 0.25% of the annual or average annual rent Not exceed 1 year 0.25% of the total rent payable over the term of the TA Exceed 1 year but does not 0.5% of the annual or average annual rent exceed 3 years Exceed 3 years 1% of the annual or average annual rent Government Rates Government Rates are payable quarterly in advance, equivalent to 5% of the annual rental value. If the rental is quoted “inclusive”, the Government Rates are already factored into the rental. If the rental is quoted “exclusive”, the tenant is required to pay the Government Rates separately. Deposit The tenant has to pay a month’s rent as a holding deposit prior to signing the TA. This will later serve as the rent for the first month. The tenant is also required to pay a security deposit, equivalent to two to three months’ rent. Once the TA is signed, the deposit held by the landlord throughout the term free of interest will be refunded to the tenant upon lease expiration if there is no breach of terms and conditions in the TA. Compensation for loss and damage suffered and costs for necessary reinstatement work of the property can be deducted from the deposit. Agency Fee The industry standard is a commission equivalent to half a month’s rental from the tenant and half a month’s rental from the landlord, both payable once the formal TA is executed. Legal Fee The TA is usually provided by the landlord or the landlord’s representative solicitor for the tenant's consent. The tenant may also appoint a solicitor to review the TA at his/her discretion. Each party shall pay for their own solicitor’s fees. Property Management Fee Payable by either the landlord or the tenant, subject to mutual agreement, covering communal services such as security, general cleaning, maintenance of common areas and amenities. GUIDE FOR LEASING A PROPERTY IN HONG KONG 7
Neighbourhood Guide - Hong Kong Island Aberdeen Chung Hom Kok Aberdeen is an area situated on the southwest Hong Kong Located on the south side of Hong Kong Island, and Island and is mainly occupied by high-rise apartments nestled between Stanley and Repulse Bay, Chung Hom and industrial buildings. The area is conveniently linked by Kok is a quiet, predominantly low-rise neighborhood of highways and well served by public transportation. mainly luxury townhouses and low-rise blocks. Under the Ap Lei Chau radar for many expatriates, the area boosts a relaxed and The coastal area is located next to Aberdeen Harbour and enjoyable atmosphere with many of the homes having connected by the Ap Lei Chau Bridge. Many residents pools and private yards. Properties here on average travel to the city by the Aberdeen Tunnel. Luxury waterfront command relatively higher rentals than many areas of the developments in Ap Lei Chau overlook harbour views and Southern district. easily access to shopping and entertainment complex. Deep Water Bay Causeway Bay Deep Water Bay is an exclusive, quiet, luxury residential It is a densely built and one of the most popular shopping area situated on the South Side of Hong Kong Island. districts in Hong Kong. The area is dominated by a mixture Accommodations of Deep Water Bay are predominately of residential and commercial buildings. Some retail large detached houses with unobstructed seaviews. There shops have the highest rental per sq ft in the world. Key are easy accesses to the famous Deep Water Bay beach, landmarks in Causeway Bay include Time Square and the the Hong Kong Golf Club and also the Royal Hong Kong Victoria Park. Yacht Club. A number of international schools in close proximity are very popular among foreign families. Central Happy Valley As the Central Business District of Hong Kong, the area is Just a short walk to Causeway Bay but a world away from home to multinational corporations and retail complexes, the district’s buzzy activity, Happy Valley surprisingly consulates of many countries are also located in Central. gives people a unique suburban feel with a slow-pace Chai Wan vibe. The area is compacted with shops, restaurants Chai Wan is at the eastern end of the urban area of Hong and banks amongst the community, with everything all Kong island with predominantly residential area that enjoy in walking distance. It has an interesting combination of stunning harbour views. The area is well served by MTR a range of new high-rise buildings and traditional older- and buses, with about 20 minutes traveling distance to style low-rise apartments and houses. Properties located Central. near the Happy Valley Racecourse can enjoy spectacular racecourse views; while those located near the hill-foot can enjoy stunning city views. 8 GUIDE FOR LEASING A PROPERTY IN HONG KONG
Jardine’s Lookout Mid-levels West Jardine’s Lookout is a luxurious residential area just above Situated between west of the Central district and Pokfulam, Happy Valley. It enjoys beautiful environment surrounded accommodation of Mid-levels West is predominantly high- by wooded hills and at the same time having a convenient rise apartment blocks that offer impressive harbor views and location with only ten minutes’ drive to the Central Central’s commercial skyline. Hottest eateries, traditional Business District. The community is well-equipped with shops and other amenities are also in close proximity. facilities and has easy accessibility to daily necessities. North Point Accommodations here range from luxury low-rise and North Point has a wide variety of historic landmarks and high-rise apartments to prestigious houses and unique art galleries to explore, more boutique hotels and townhouses. luxury micro-apartments can be found in the neighbourhood Mid-levels Central recently. Mid-levels Central is an affluent area above Central and North Point Hill below the Peak, the neighbourhood is populated by the This low-density residential district is surrounded by middle class and expatriate professionals. It enjoys the Braemar Hill. Apartments in this area generally enjoy ease of access as the Central Business District is within mountainous views. Major recreation park Choi Sai Woo Park walking distance. The complexes in new developments is in close proximity. are well provided with facilities such as club houses and gymnasiums. Pokfulam Mid-levels East Situated at the western end of the Southern District on Located on the east of Hong Kong Park, and it has the Hong Kong Island, Pokfulam is characterized by a relaxed lowest population density in Mid-levels. Accommodations ambiance with a wide variety of properties facing the South in the area range from colonial developments of mid-rise China Sea. With bountiful sea views across the West Lamma apartments to new luxurious apartments with stunning city Channel, the district is gifted with some of Hong Kong’s views. A wide variety of multi-national schools are available most stunning sunsets. In Pokfulam, accommodations range in Mid-levels East. from prestigious townhouses to modern high-rise estates, or older style apartments. GUIDE FOR LEASING A PROPERTY IN HONG KONG 9
Quarry Bay Shek O Located on the eastern part of the Hong Kong Island, Shek O is a beachside area located in the south-eastern Quarry Bay transformed from an industrial area to a corner of Hong Kong Island. Its Shek O Beach is one of the commercial and residential neighborhood. The presence most popular beaches in Hong Kong, hence attracting lots of the large business hub, Taikoo Place, has brought of local people who desire to take a break from the hectic vibrancy to the place. city life to come. The area is scattered with townhouses and detached houses, while there are small village houses Repulse Bay nestled around the beach side. Repulse Bay is a bay in the southern part of Hong Kong Sheung Wan Island. Famous of its beautiful Repulse Bay Beach with a Sheung Wan has a combination of dense residential and relaxed resort-like atmosphere, the area is highly popular commercial towers. The Hong Kong Macau Ferry Terminal among expatriates. It boasts a combination of luxury in the area provides ferry and helicopter services to Macau high-rises and townhouses, most with commanding and Mainland China. views over the bay and the South China Sea. Only a 15 to 30 minutes drive to Central, properties are also in proximity to Shouson Hill international schools, well-stocked gourmet supermarkets Shouson Hill is located on the south side of Hong Kong and Hong Kong’s finest golf, cricket & yacht clubs. Island, between Aberdeen and Deep Water Bay. The area Sai Ying Pun consists primarily of large, low-rise apartments, deluxe Located between Sheung Wan and Kennedy Town, its villas and townhouses that are surrounded with pleasant strong transport connections are enhanced with an MTR natural environment. Nearby hot spots include Ocean Park, station, trams and buses services. A rich combination of the Hong Kong Golf Club and the Marina Club, making art galleries and unique cafés can be found in Sai Ying Pun, the area a favourite to the country club elites. There are therefore, it attracts a good number of young executives reputable international schools such as the South Island with an active lifestyle to live here. School and French International School nearby as well. Shau Kei Wan Located on the eastern part of the Hong Kong Island, Shau Kei Wan is predominantly a residential district surrounding by high-rise buildings. There are several shopping arcades and public facilities in the neighborhood to satisfy daily needs of life. 10 GUIDE FOR LEASING A PROPERTY IN HONG KONG
Stanley The Peak Stanley is a coastal town locating on the south side of The Peak is regarded as the most prestigious location Hong Kong Island. With Stanley beach and open-air in the city. The area is scattered with luxurious detached market, it is a popular weekend spot for locals and tourists. houses and townhouses with harbour or the southern Accommodations in the area range from prestigious district sea views. The Peak is well served by buses, taxis townhouses to low-rise apartments around the market, the and the Peak Tram, with just a 15 to 20 minutes drive to rents are still relatively affordable in the Southern district. Central. Top international schools and first-rate hospitals Tai Hang are also in close proximity. Tai Hang is an easily accessible area locating above Wan Chai Happy Valley. Only a 5 to 10 minutes drive to the Central Wan Chai is one of the busiest commercial areas in Hong Business District and the shopping district Causeway Kong. Its major landmark includes various skyscrapers Bay, the Cross Harbour Tunnel linking to Kowloon is also such as Central Plaza and Hopewell Centre, and most in close proximity. It has a combination of older mid-rises notably, the Hong Kong Convention and Exhibition Centre. and modern high-rise apartments. Several multi-national Residential properties in the area consist of a mixture of schools nearby are popular among foreign families. old and modern buildings. Tai Tam Western/ Kennedy Town Tai Tam is on Hong Kong Island’s south-eastern side, it Situated at the northwestern part of Hong Kong Island, consists primarily of high-rise and townhouse estates. Kennedy Town has an interesting combination of a range The housing developments are relatively new and well- of traditional older-style apartments and modern high-rise equipped with swimming pools and club facilities. The buildings with extensive club house facilities. Thanks to nearby hiking trails, Turtle Cove Beach and country park the redevelopment projects and recent MTR access, more are perfect spots to relax away from daily busy life. upscale restaurants and modern amenities are moving in. Taikoo Shing Wong Chuk Hang Taikoo Shing is a large-scale private residential Wong Chuk Hang is an industrial and residential area in the development in Quarry Bay. Home prices here have long Southern district of Hong Kong Island. It has become a new been a benchmark for Hong Kong’s housing market. The art and culture focus in the city with increasing numbers area is popular among Japanese and Korean expatriate of boutique hotels, lofts and galleries. More high-quality communities in Hong Kong. restaurants, showrooms and event spaces are hidden in the ex-factory spaces recently. GUIDE FOR LEASING A PROPERTY IN HONG KONG 11
Neighbourhood Guide - Cheung Sha Wan/ Sham Shui Po Cheung Sha Wan has a mixture of residential and industrial Kowloon buildings, and it is a famous fashion wholesale area in the city. Ho Man Tin/ Waterloo Road Ho Man Tin is a traditional prestigious residential area comprising a mixed of luxury high-rise apartments and various low-rise development houses. The area is located between Hung Hom and Mong Kok, and it is conveniently served by public transportations. With concentrated number of schools and learning academies, Ho Man Tin is also the sought-after option for families with schooling children. 12 GUIDE FOR LEASING A PROPERTY IN HONG KONG
Hung Hom/ To Kwa Wan Tai Kok Tsui The area mainly serves for residential purpose, but it is Tai Kok Tsui has undergone massive revitalization in mixed with some industrial buildings nearby. As the Cross recent years, many old residential and industrial buildings Harbour Tunnel is in proximity, it is convenient for tenants in the area have been replaced by the high-rise residential heading to and from Hong Kong Island. buildings. Kowloon Tong Tsim Sha Tsui Kowloon Tong is one of Kowloon’s affluent and Located at the tip of the Kowloon peninsula, the low-density residential areas, dominating by detached accommodation is predominantly high-rise apartments houses, townhouses and low-rise apartments. This providing panoramic views of Tsim Sha Tsui skyline and well-structured area is popular among celebrities, Victoria Harbour. A concentrated number of world class billionaires and corporate senior executives. The hotels, shopping malls and eateries are available in neighbourhood also offers one of the best school networks Tsim Sha Tsui. The area is also well connected to every in Hong Kong and a comprehensive range of amenities corner of the city by the cross harbour ferries, including shopping malls, supermarkets and restaurants. Airport Express and MTR. GUIDE FOR LEASING A PROPERTY IN HONG KONG 13
Neighbourhood Guide - New Territories Clear Water Bay Shatin/ Fo Tan Clear Water Bay is a bay on the east coast of Kowloon. Shatin is one of the most densely populated districts in the Famous of its beaches and outdoor activities with a country New Territories. New Town Plaza, the largest shopping mall living atmosphere, the area is popular among expatriates in the area, offers a wide variety of international boutiques, who look for a rural lifestyle. The area is scattered with supermarkets and eateries to the neighbourhood. townhouses of plentiful size, usually with private gardens Tai Po and pools. Tai Po has the third lowest population density in Gold Coast Hong Kong. With several bicycle tracks and riverside Gold Coast is a beachfront and resort-style area in Tuen promenades in the area, it is also one of the greenest Mun. The resort hotel and restaurants are popular weekend neighbourhoods in the city. destinations for those looking to escape from urban life. Tseung Kwan O/ Hang Hau Sai Kung Tseung Kwan O is one of the nine new towns in Hong Kong, The area is the “Back Garden of Hong Kong” with built mainly on reclaimed land in Sai Kung district. All numerous valuable natural resources. Sai Kung is similar transportation networks are well connected to shopping to Clearwater Bay in terms of living atmosphere, housing complexes and major residential developments in the area. ranges from detached house to village houses with terraces. The town centre boasts an increasing mix of restaurants and cafes on the waterfront and within the village. 14 GUIDE FOR LEASING A PROPERTY IN HONG KONG
Neighbourhood Guide - Outlying Islands Discovery Bay Tung Chung Located on Lantau Island, Discovery Bay is a resort-style As one of the most recent new towns, Tung Chung is residential area comprising garden houses and predominantly a residential area on the northwestern high-rise residential developments. It is a multicultural coast of Lantau Island. It is adjacent to the Hong Kong and self-contained community, containing European- International Airport and HongKong-Zhuhai-Macao Bridge. styled shops, restaurants and two international schools Due to its proximity to the key transport infrastructure, it is in the neighbourhood. Despite its location in the Islands a popular location for frequent travellers. District, it takes only 25 minutes to the Central Pier by ferry, and 15 to 20 minutes to Tung Chung MTR Station by shuttle bus. GUIDE FOR LEASING A PROPERTY IN HONG KONG 15
Neighbourhood Map 16 GUIDE FOR LEASING A PROPERTY IN HONG KONG
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Neighbourhood Map - Hong Kong Island 18 GUIDE FOR LEASING A PROPERTY IN HONG KONG
Neighbourhood Map - Kowloon and New Territories GUIDE FOR LEASING A PROPERTY IN HONG KONG 19
Tips for Tenants 1. Prepare a list of favourable features of your ideal home. Pick a few desirable neighbourhoods to start home search. 2. Inspect property at different times of day to gain better understanding of it. 3. Check if the rent is all inclusive (eg management fee and government rates). 4. If you intent to keep pets, make sure both the building’s Deed of Mutual Covenant (DMC) and the landlord allow. 5. Understand surroundings and future development plans (if any) in the neighbourhood. 6. Prior to handover, arrange for utilities and buy home insurance policy. 20 GUIDE FOR LEASING A PROPERTY IN HONG KONG
At a Glance Typical Lease Duration Two years (one year fixed and one year optional). — After the first year of a typical two-year lease, the tenant has the right to terminate the lease under the break clause. Written termination notice must be given to the Termination landlord two or three months in advance. — Early termination within the first year shall be negotiated between the tenant and the landlord to find replacement tenant and to determine the compensation. Lease Renewal Upon lease expiry, the landlord has the right to take back the property or negotiate the lease renewal with the tenant. Stamp Duty 0.25%-1% of the annual rental value, subject to the lease period. Government Rates Payable quarterly in advance, equivalent to 5% of the annual rental value. Deposit Two to three months’ rent, refundable upon lease expiry, free of interest. Agency Fee Commission equivalent to half month’s rental from the tenant and half month’s rental from the landlord. Legal Fee The tenant may appoint a solicitor to review the lease at his/her discretion for an agreed amount of fee. Property Payable monthly in advance either by the landlord or the tenant, subject to agreement. Management Fee Utilities Consumption is metered and payable by the tenant. — Fixed rent during the lease duration. Rental Payment — Monthly payment in advance. — A delay of more than 15 days could result in forfeiture of contract and premature termination of tenancy. Property Insurance Landlord’s responsibility. Home Insurance Tenant’s responsibility. Sub-letting Not an acceptable market practice. Repair Landlord: responsible for exterior, structure and common areas. Tenant: responsible for interior. Building Tenants should surrender the rental premises in the same condition as when originally Reinstatement leased, normal wear and tear excepted. Note: The above information is for reference only. In case of doubt, please refer to the relevant regulations or seek professional advice. GUIDE FOR LEASING A PROPERTY IN HONG KONG 21
Residential Agency Team of the Year. AWARDED BY RICS HONG KONG FOR FIVE CONSECUTIVE YEARS SINCE 2012 22 GUIDE FOR LEASING A PROPERTY IN HONG KONG
Why Knight Frank? Our award-winning residential team has an impressive track record and in-depth knowledge of the local residential market. Whether you want to buy, rent or sell residential property, our specialists are on Residential Agency hand to provide expert knowledge of domestic property markets. Valued as trusted partners, we anticipate clients’ needs, bring our international network together, and connect the dots with various innovations and platforms. For corporate clients, our custom-built residential portal provides relocatees with Team of the Year. access to apartments within their budget, as well as important information about their destination city. Simultaneously, it allows Human Resources teams to track the status of inspections and lease negotiations. Our global residential search platform and mobile app offer a one-stop-shop solution for property searchers. Contact us +852 2840 1177 [email protected] GUIDE FOR LEASING A PROPERTY IN HONG KONG 23
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