Why does renting houses have to go through stamp duty? Stamp duty procedures and precautions

In the process of renting a property, the landlord will generally sign a formal lease agreement with the tenant, and then will have a stamp, or pay the lease stamp duty, which simply means stamping at the Inland Revenue Department. So why do it? What exactly does this process involve? What do I need to do? Are both parties responsible for stamping after signing the lease agreement? The above problems will be solved one by one in this article.

Why do I need to stamp/pay stamp duty?

It is commonly known as stamp duty, which means paying stamp duty to the Inland Revenue Department. A simple explanation is that the purpose of stamping is to make the lease document officially recognized by law, and stamping/paying stamp duty is mainly to protect the landlord and the tenant legally. In the case of rent tyrants, bad landlords, etc.), the tenancy agreement that has not been stamped/paid stamp duty or cannot be used as a basis for reference or evidence in court, the problem is difficult to identify.

When will it be stamped? Stamping procedures

Generally speaking, the time limit for stamping is within 30 days after signing the formal tenancy agreement, and the landlord needs to go to the Inland Revenue Department or stamp it online. That is, the process of stamping/paying stamp duty should also be done afterward. Stamp the “Stamp Certificate” and hand it over to both the landlord and the tenant for retention.

The following is a summary of the procedures for printing/paying stamp duty:

1. Both the landlord and the tenant sign a formal lease agreement

2. Within 30 days after the tenancy agreement is signed, the application and required documents can be submitted in person to the Stamp Office of the Inland Revenue Department, by post, or online

3. After completing the procedures, the “stamp certificate” and the formal tenancy agreement should preferably be in duplicate for the landlord and tenant to keep the property properly, so as to facilitate the protection of their respective rights and interests in the future.

How should it be stamped?

As mentioned above, the landlord must submit stamp duty to the Inland Revenue Department within one month after signing the tenancy agreement with the tenant. He can also find an agent to handle it on his behalf. He can go to the Inland Revenue Department’s Stamp Office for assessment in person or submit the application by mail and the required documents can also be stamped online.

In fact, whether it is a landlord or a tenant who intends to release the lease, they can use the government’s “e-tax” system to perform the procedures for stamping/payment of stamp duty online, but the landlord generally handles the leasing, and the landlord has a deposit from the tenant, so it is relatively convenient for the landlord to print a stamp to save money for the stamp.

It is worth mentioning that the Tenancy Ordinance stipulates that, to protect the landlord and the tenant, the landlord must also submit the “CR109” form (New Lease or Renewal Agreement to the Rating and Valuation Department within one month after the signing of the contract between the two parties). Notice to declare the lease information and send it back to the landlord and tenant in duplicate. If this form is not submitted, “the landlord or tenant may not be entitled to take legal action to recover the rent under the relevant tenancy agreement”.

When stamping/paying stamp duty, the most reliable way is to stamp the original tenancy agreement of the landlord and the tenant, so that both parties have a legally recognized tenancy agreement and a valid stamp certificate for their respective preservation.

Formally, using the online method to stamp/pay stamp duty, the electronic stamp certificate will be the same as the paper stamp.

The above information is for reference only. If you have any questions about stamp duty, stamp duty, or accounting, we welcome your inquiry.