Hong Kong expats (foreigners) buying property in the UK Hong-Kongers (Chinese expats) are looking to invest in UK property as house prices in the United Kingdom are far cheaper than in Hong Kong. Can foreigners buy property in the United Kingdom? The short answer is, yes of course. We are seeing several foreigners from different countries buying UK property as it is seen as a safe investment. Due to other favourable economic factors, many Hong Kongers also relocate to the UK to build a property portfolio. What are the basics of Hong Kong expats buying property in the UK? The UK property market has a history of retaining its value and delivering a return on investment, making it attractive to buyers from Hong Kong. Hong-Kongers also look to relocate to the UK, as it is a country with a well-defined rule of law and stable democracy that protects property rights. More than 113,000 Hong-Kongers have been granted visas to the UK through the new British Nationals Overseas (BNO) scheme since it opened on 31st January 2021. This means more Hong Kong residents are buying more property to rent out for income in the UK. As of August 2021, Hong-Kongers became central London’s fifth most significant group of foreign property investors. Hong Kong residents also pool together to invest in UK property and relocate. This gives Hong-Kongers looking to move to the UK a source of income from property before they relocate. Why do Hong Kongers relocate to the UK? The political shift in Hong Kong, plus a publicly-criticised response to Covid-19, has led to an influx of Hong Kongers looking to relocate and buy property in the UK since 2020. During the pandemic, Hong Kongers faced a strict zero-Covid strategy by the Chinese government. This included mass testings, strict curfews and disorganised lockdowns. During the first 18 months of the pandemic, anyone travelling into Hong Kong also faced a strict three-week quarantine. The result was a population reduction of more than 23,500 Hong Kongers in 2021 alone, as more and more left China for the UK, Canada and Australia. In 2020, the UK offered Hong Kong citizens holding British National (Overseas) status and their immediate family members a pathway to citizenship. The BN(O) pathway to British nationality was offered to all Hong Kongers before China took over in 1997. According to the Home Office, an estimated 2.9 million BN(O) status holders and their 2.3 million dependants were eligible to relocate to the UK. Since the fast-track residency scheme was launched, London has seen a 144% increase in property transactions by Hong Kong buyers. Hong Kongers now account for the largest group of international property owners across London, Manchester, Birmingham, Leeds and Liverpool. Given this exodus from Hong Kong since 2020, it is hardly surprising that many more Hong Kongers are looking to relocate to the UK and buy property. Can a Hong Kong BNO holder purchase UK residential properties? To get a mortgage on a rental property in the UK, a Hong Kong BN(O) holder will need at least a 25% deposit and the lender will need to be convinced that the investment is viable. This is not dependent on whether a Hong Konger decides to relocate to the UK or not. What benefits do Honger Kongers get? A steady income from property rental in the UK is helpful to any Hong Kongers applying for British citizenship. BN(O) holders from Hong Kong need to prove they can provide financial support for themselves for at least six months. It has been estimated that over 300,000 Hong Kong residents could relocate to the UK over the next five years. There has been a particular interest in Hong Kong property buyers in older apartments and houses as rental assets in recent months. Hong Kongers have an affinity for property investment, with property prices in Hong Kong among the most expensive in the world. Hong Kong residents that relocate to the UK are presented with significant opportunities in property investment options in the major cities. Can Hong Kong residents buy property in the United Kingdom? There are no restrictions for Hong Kongers who want to buy property in the UK. Hong Kong citizens who want to live in their UK property will first need to gain residential status in the UK. Hong Kongers do not need residential status in the UK to invest in property if they do not plan to live there. It is possible to get a UK mortgage if you live in Hong Kong. There are fewer lenders who offer Hong Kongers non-resident mortgages. It is easier to get a UK mortgage if a Hong Konger decides to relocate and is resident in the UK. Other factors include the type of residency, visa, employment status and income. How different is buying property in the UK compared to Hong Kong? Transferring legal property ownership from the seller to the buyer is called conveyancing in the UK. Hong Kongers will need to find a solicitor or conveyancer to do this. Once a price has been agreed upon, the seller or their UK estate agent will complete a Memorandum of Sale. This serves a similar purpose to a Provisional Agreement for Sale and Purchase (PASP) in Hong Kong, but it is not legally binding in the UK. Once the solicitor has checked everything, they exchange contracts with the seller’s solicitor. This is similar to the Formal Agreement for Sale and Purchase. At this stage, a Hong Kong property buyer in the UK will need to pay a non-refundable deposit, typically 10%, in exchange for contracts, and the sale is then legally binding. Next, the settlement or completion date is agreed upon, and after this, a Hong Konger buying property in the UK will need to pay the balance on the property and receive keys. The solicitor will register the sale, or what is known as title, with HM Land Registry. Property in the UK is either freehold property or leasehold property. Most UK houses are freehold. Many UK apartments or flats are leaseholds. With freehold property, a buyer from Hong Kong owns the property and the land outright. When a property in the UK is a leasehold, the property owner owns the property but leases the right to occupy the freeholder for several years. This is similar in concept to leasehold in Hong Kong. Buyers of leasehold property in the UK may need to pay annual ground rent, similar to the Government Rent system in Hong Kong. Before buying a leasehold property in the UK, it is advisable for a Hong Konger to check the length of the lease remaining and the ground rent payable. Stamp Duty Land Tax (SDLT) is a tax payable by buyers of property in the UK. It resembles Ad Valorem Stamp Duty (AVD) in Hong Kong. Stamp Duty is payable as a percentage of the property sale price, but it varies according to the property’s value and the buyer’s status. If you already own a property in the UK, you will have to pay an additional or higher rate of SDLT on the property. This is 3% in addition to the normal rate. If you are not a UK resident, you will have to pay a non-resident SDLT rate of 2%, which is in addition to the normal rate. There is no Stamp Duty when you sell a UK property, as sometimes applies in Hong Kong. If you’re a Hong Konger renting out property in the UK, there could be income tax to pay on the rental income, depending on how much it is and your tax position in the UK. You might have to pay Capital Gains Tax to the UK government when you sell your property. There might also be Inheritance Tax to pay by those who might inherit your UK property in the future. It is advisable to take expert advice on property investment in the UK. Check how it will affect your tax position in Hong Kong and the UK before you buy your property. It is worth speaking to Hong Kong & UK tax advisors.
Hong Kong expats (foreigners) buying property in the UK Hong-Kongers (Chinese expats) are looking to invest in UK property as house prices in the United Kingdom are far cheaper than in Hong Kong. Can foreigners buy property in the United Kingdom? The short answer is, yes of course. We are seeing several foreigners from different countries buying UK property as it is seen as a safe investment. Due to other favourable economic factors, many Hong Kongers also relocate to the UK to build a property portfolio. What are the basics of Hong Kong expats buying property in the UK? The UK property market has a history of retaining its value and delivering a return on investment, making it attractive to buyers from Hong Kong. Hong-Kongers also look to relocate to the UK, as it is a country with a well-defined rule of law and stable democracy that protects property rights. More than 113,000 Hong-Kongers have been granted visas to the UK through the new British Nationals Overseas (BNO) scheme since it opened on 31st January 2021. This means more Hong Kong residents are buying more property to rent out for income in the UK. As of August 2021, Hong-Kongers became central London’s fifth most significant group of foreign property investors. Hong Kong residents also pool together to invest in UK property and relocate. This gives Hong-Kongers looking to move to the UK a source of income from property before they relocate. Why do Hong Kongers relocate to the UK? The political shift in Hong Kong, plus a publicly-criticised response to Covid-19, has led to an influx of Hong Kongers looking to relocate and buy property in the UK since 2020. During the pandemic, Hong Kongers faced a strict zero-Covid strategy by the Chinese government. This included mass testings, strict curfews and disorganised lockdowns. During the first 18 months of the pandemic, anyone travelling into Hong Kong also faced a strict three-week quarantine. The result was a population reduction of more than 23,500 Hong Kongers in 2021 alone, as more and more left China for the UK, Canada and Australia. In 2020, the UK offered Hong Kong citizens holding British National (Overseas) status and their immediate family members a pathway to citizenship. The BN(O) pathway to British nationality was offered to all Hong Kongers before China took over in 1997. According to the Home Office, an estimated 2.9 million BN(O) status holders and their 2.3 million dependants were eligible to relocate to the UK. Since the fast-track residency scheme was launched, London has seen a 144% increase in property transactions by Hong Kong buyers. Hong Kongers now account for the largest group of international property owners across London, Manchester, Birmingham, Leeds and Liverpool. Given this exodus from Hong Kong since 2020, it is hardly surprising that many more Hong Kongers are looking to relocate to the UK and buy property. Can a Hong Kong BNO holder purchase UK residential properties? To get a mortgage on a rental property in the UK, a Hong Kong BN(O) holder will need at least a 25% deposit and the lender will need to be convinced that the investment is viable. This is not dependent on whether a Hong Konger decides to relocate to the UK or not. What benefits do Honger Kongers get? A steady income from property rental in the UK is helpful to any Hong Kongers applying for British citizenship. BN(O) holders from Hong Kong need to prove they can provide financial support for themselves for at least six months. It has been estimated that over 300,000 Hong Kong residents could relocate to the UK over the next five years. There has been a particular interest in Hong Kong property buyers in older apartments and houses as rental assets in recent months. Hong Kongers have an affinity for property investment, with property prices in Hong Kong among the most expensive in the world. Hong Kong residents that relocate to the UK are presented with significant opportunities in property investment options in the major cities. Can Hong Kong residents buy property in the United Kingdom? There are no restrictions for Hong Kongers who want to buy property in the UK. Hong Kong citizens who want to live in their UK property will first need to gain residential status in the UK. Hong Kongers do not need residential status in the UK to invest in property if they do not plan to live there. It is possible to get a UK mortgage if you live in Hong Kong. There are fewer lenders who offer Hong Kongers non-resident mortgages. It is easier to get a UK mortgage if a Hong Konger decides to relocate and is resident in the UK. Other factors include the type of residency, visa, employment status and income. How different is buying property in the UK compared to Hong Kong? Transferring legal property ownership from the seller to the buyer is called conveyancing in the UK. Hong Kongers will need to find a solicitor or conveyancer to do this. Once a price has been agreed upon, the seller or their UK estate agent will complete a Memorandum of Sale. This serves a similar purpose to a Provisional Agreement for Sale and Purchase (PASP) in Hong Kong, but it is not legally binding in the UK. Once the solicitor has checked everything, they exchange contracts with the seller’s solicitor. This is similar to the Formal Agreement for Sale and Purchase. At this stage, a Hong Kong property buyer in the UK will need to pay a non-refundable deposit, typically 10%, in exchange for contracts, and the sale is then legally binding. Next, the settlement or completion date is agreed upon, and after this, a Hong Konger buying property in the UK will need to pay the balance on the property and receive keys. The solicitor will register the sale, or what is known as title, with HM Land Registry. Property in the UK is either freehold property or leasehold property. Most UK houses are freehold. Many UK apartments or flats are leaseholds. With freehold property, a buyer from Hong Kong owns the property and the land outright. When a property in the UK is a leasehold, the property owner owns the property but leases the right to occupy the freeholder for several years. This is similar in concept to leasehold in Hong Kong. Buyers of leasehold property in the UK may need to pay annual ground rent, similar to the Government Rent system in Hong Kong. Before buying a leasehold property in the UK, it is advisable for a Hong Konger to check the length of the lease remaining and the ground rent payable. Stamp Duty Land Tax (SDLT) is a tax payable by buyers of property in the UK. It resembles Ad Valorem Stamp Duty (AVD) in Hong Kong. Stamp Duty is payable as a percentage of the property sale price, but it varies according to the property’s value and the buyer’s status. If you already own a property in the UK, you will have to pay an additional or higher rate of SDLT on the property. This is 3% in addition to the normal rate. If you are not a UK resident, you will have to pay a non-resident SDLT rate of 2%, which is in addition to the normal rate. There is no Stamp Duty when you sell a UK property, as sometimes applies in Hong Kong. If you’re a Hong Konger renting out property in the UK, there could be income tax to pay on the rental income, depending on how much it is and your tax position in the UK. You might have to pay Capital Gains Tax to the UK government when you sell your property. There might also be Inheritance Tax to pay by those who might inherit your UK property in the future. It is advisable to take expert advice on property investment in the UK. Check how it will affect your tax position in Hong Kong and the UK before you buy your property. It is worth speaking to Hong Kong & UK tax advisors.
