Difficult to start in a country where stamp duty are 16% !

4 Replies

Hi Everyone,

It is a honor to be able to write on this forum, i hope this message find you well.I am looking for good advise from qualified people that have experience in this matter, and i belive i found the right person... you ;-)My name is Oliver and I live in a country where real estate is heavily taxed by the government (they call that "the Stamp Duty", and it is 16% of the property value), and the gouverment keep a eye on how a RE investor is operating his business.

I would love to start my real estate investment with no money down, I belive it is maybe the most challenging but, at the same time the most rewarding as you really start with very little, and grow your way up, and without to much risk exposure. I am arleady able to find sellers, and buyers, and both understand and agree with my terms, the issues that i encounter are the following: Government will tax me as soon as I take ownership of a property, so if my name (or coorporate) is on any contract, i will be taxed, (the tax is 16% of the property value). Government will also tax me as soon as i resell the property (again 16%). So i would be taxed 16% as soon as any documnent with my name or company is issue, and another 16% when i sell the property... :-( Even with the investment model no money down (read your book a couple of times ;-), the "stamp duty" is a big killer and leave no room at all for any profit. Do you have any solution for this problem? I suppose some states in the USA have similar rules and i am sure there is a way to go around it. Any suggestions, help, guide, solutions are very very welcome please. Thank very so very much for your time. Oliver 

Oliver,

The only way I can see to do it is to build it into the price, such that you get that as a cash credit at closing.

Good Luck!

Jim

There are 100s and 1000s of billionaires who stroke rich in real estate in HK every day. Ask your neighbors about it.  Most are done with funds that is not considered legal and pay little if any tax.....

Originally posted by @James C.:

Oliver,

The only way I can see to do it is to build it into the price, such that you get that as a cash credit at closing.

Good Luck!

Jim

Hi Jim, 

Thanks for your message 

If i do that, the price of the RE will just be so high... imagine, 16% on the buy side and 16% on the sell... 

I need to find another way... 

Originally posted by @Sam Shueh :

There are 100s and 1000s of billionaires who stroke rich in real estate in HK every day. Ask your neighbors about it.  Most are done with funds that is not considered legal and pay little if any tax.....

Hi Sam,

I agree with you there is a lot of "easy rich" people here in hong kong, but most of them have bought properties for over 10 years ago, and these properties are now worthy a fortune.

What i am looking for is a solution that would save me the 16% stamp duty on the buy and also the sell...

I had a look at land trust but it seems that the government already put there hands on that.

I am thinking perhaps the best way is to get a RE license and get a commission from the buyer..

After all my approach would be a zero (or very little) down payment with the intention to keep some of these properties i find for long terms, but if i don't find a solution around these 16% X2 stamp duty, then the RE license maybe needed to get a commission on each deal.

Any suggestions are very welcome please ;-)

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