Why say that Lower transaction fee in selling property ?

Background

1. Mr. Achim is 100% shareholder of H Ltd (a Hong Kong company);
2. H LIMTTED owns a Hong Kong  property for long term investment and no finance required from bank.

New Way

1. Mr. Achim needs to sell the property to Mr. Mike ;
2. Market value of the property is HK$6,000,000 ;
3. If Hong Kong LIMITED sells the property to Mr. Mike, stamp duty payable is around 3% of HK$6,000,000 = HK$180,000 (the rate as at 9/2008);
4. If Mr. Achim sells share of Hong Kong LIMITED to Mr. Mike, then, Mr. Mike owns the property indirectly.

Benefit

1. Share transfer stamp duty is HK$1 per HK$1,000 value;
2. Therefore, stamp duty will be around HK$6,000,000 / 1,000 = HK$6,000 ;
3. Even both buyer and seller need to pay the stamp duty, it is only around HK$12,000 ;