Stamp Duty and Trading Costs
Buyers and sellers of Hong Kong stocks each pay 0.1% stamp duty, with anything under a dollar counted as a dollar; add trading fees, levies and broker commission and you have the cost of each trade.
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Text version · Hong Kong Stock Rules, lesson 5: “Stamp Duty and Trading Costs”
Buyers and sellers of Hong Kong stocks each pay 0.1% stamp duty, with anything under a dollar counted as a dollar; add trading fees, levies and broker commission and you have the cost of each trade.
Stamp duty: 0.1% on each side
Both buyers and sellers pay stamp duty, at 0.1% of the trade value (cut from 0.13% on November 17, 2023). Buy once and sell once and you pay it twice.
Rounded up to the next dollar
Stamp duty is rounded up to whole Hong Kong dollars: on a HK$1,200 trade the 0.1% works out to HK$1.2, but you pay HK$2. The smaller the trade, the bigger the effect of rounding.
Other fees
There's also the trading fee and the SFC transaction levy, both at very low rates; commission, platform fees and settlement fees are set by your broker, and many brokers have a minimum commission.
Key takeaways
- Buyer and seller each pay stamp duty of 0.1% of the trade value (cut from 0.13% on November 17, 2023), and anything under one dollar counts as one dollar.
- There's also the exchange trading fee, the SFC transaction levy and the AFRC transaction levy, all at very low rates and paid by both sides.
- Commission, platform fees and settlement fees are set by your broker, and many have a per-trade minimum, so fees take a noticeably bigger share of small trades.
- Buy once and sell once, and the price has to rise more than the round-trip costs before you break even.
Try it yourself
You can do these exercises in this lesson's interactive simulation:
- Keep the default: a 1,000-share lot at HK$15.02. What's the stamp duty when you buy? And when you sell?
- Set the quantity to 100 shares: what does the 0.1% stamp duty work out to? What do you actually pay?
- Compare the two commission settings: on a small trade, which fee takes the biggest share?
- Watch the “break-even move”: how does it change as you raise the quantity from 100 to 10,000 shares?
Quiz and explanations
- 1. How is Hong Kong stamp duty charged?
- Answer: Buyer and seller each pay 0.1% of the trade value.Hong Kong stamp duty is paid by both buyer and seller, at 0.1% of the trade value.
- 2. You buy HK$20,000 of Hong Kong stock. How much stamp duty do you pay?
- Answer: HK$20.HK$20,000 × 0.1% = HK$20.
- 3. A purchase worth HK$1,200. How much stamp duty?
- Answer: HK$2.The 0.1% works out to HK$1.2, but Hong Kong stamp duty counts anything under a dollar as a full dollar, so it rounds up to HK$2.
Terms in this lesson
- commission (Commission): The fee you pay your broker each time you buy or sell, which comes straight out of your profit.
- trading fee (Trading Fee): A fee the Hong Kong exchange charges both buyer and seller on each trade's value. The rate is very low; it counts toward trading costs along with commission and stamp duty.
- minimum commission (Minimum Commission): The lowest commission a broker charges per trade. When a trade is very small and the percentage commission falls below it, you still pay the minimum, so fees take a bigger share.
- SFC transaction levy (SFC Transaction Levy): A levy Hong Kong's Securities and Futures Commission charges both buyer and seller on the trade value; there's also an even smaller AFRC transaction levy.
- stamp duty (Stamp Duty): A government tax on share trades. A-shares charge 0.05% on sales only; in Hong Kong buyer and seller each pay 0.1%.