Levy Collection under Property Management Services Ordinance (Cap. 626)
This Alert is a follow-up to HWB's January 2017 Property and Building Management Law Alert. To briefly recap, the Property Management Services Ordinance ("Ordinance") was passed during May 2017 to monitor the operation of property management companies ("PMCs") and practitioners.
The main changes brought about by the enactment of the Ordinance include (among other things) the establishment of the Property Management Services Authority ("PMSA") and a new 'licencing' system for PMCs. These changes were implemented to assist PMCs achieve an appropriate industry standard, given the trend of the professionalization of property management services.
Part 8 of the Ordinance
Part 8 of the Ordinance and the Property Management Services (Levy) Regulation came into operation on 1 July 2018.
This part of the Ordinance refers to a levy which is payable for each leviable instrument. A leviable instrument is a conveyance on sale chargeable with stamp duty. Generally, the purchaser or the transferee is liable to pay the levy. Any person with a vested interest in the immovable property should have the obligation to pay the levy. In situations where there is more than one transferee, they are jointly and severally liable to pay the levy.
Levy and consequence of late payment
The levy payable for a leviable instrument is fixed at HK$350, to be paid within 30 days after the instrument is executed. The levy will be collected on behalf of the PMSA by the Stamp Office of the Inland Revenue Department, when stamp duty is submitted for stamping.
Non-payment or late payment of the levy will attract penalties under sections 57 and 58 of the Ordinance. The penalty is two times the levy payable if late payment is made within one month of the deadline; four times the levy payable for non-payment / late payment of not more than two months from the deadline. If the outstanding levy is not settled within four months of the deadline, the PMSA can register a Certificate in the Land Registry against any premises or land in respect of which the levy and penalty arose in accordance with section 59 of the Ordinance.
Upon registration of the Certificate, the levy and penalty are recoverable from a person who appears from the Land Register to be the owner of the premises or land. The Certificate also constitutes a legal charge on the premises or land. A properly registered Certificate has priority starting from the day after the date of its registration. The PMSA may also recover the outstanding amount of any levy or penalty payable as a civil debt under section 60 of the Ordinance.
Under the Property Management Services (Levy) Regulation, a person is not liable to pay a levy under Part 8 of the Ordinance if that person is not liable to pay stamp duty in respect of a leviable instrument under sections 41 or 41(3) of the Stamp Duty Ordinance.
Accordingly, the government and any incorporated public officer or person acting in his capacity as a public officer shall not be liable for payment of a levy under Part 8 of the Ordinance. This exemption does not apply to any public officer acting in his capacity as Official Administrator, Official Receiver, Official Trustee or liquidator, or any public officer acting under any Order of any Court.
With the first of many key sections of the Ordinance coming into operation, building managers should keep themselves updated as to any guidelines issued by the PMSA to ensure they stay on top of the changes.
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