Tenancy Agreement HK: Cap. 7 and Stamp Duty Rules

A tenancy agreement grants exclusive possession of defined premises for a term certain in return for rent, which separates it from a licence, where the occupier has permission but no estate in the land. Hong Kong practice also divides a tenancy agreement from a lease. Under section 4(1) of the Conveyancing and Property Ordinance (Cap. 219) a legal estate is created by deed, so a term longer than three years must be granted by a lease executed as a deed. A domestic tenancy of two years sits well below that threshold, is validly made under hand before a witness, and keeps its priority without registration under section 3(2) of the Land Registration Ordinance (Cap. 128).

The 1+1 structure confuses people, including some agents. It is not two consecutive one year tenancies. It is a single fixed term of two years in which one party, or both, may end the tenancy at or after the twelve month mark on written notice of one or two months. The distinction changes the stamp duty rate, because the Stamp Office treats a fixed term terminable on an earlier event as a tenancy for the whole fixed term. Our other Hong Kong property and rental templates follow the same conventions.

The governing statute is the Landlord and Tenant (Consolidation) Ordinance (Cap. 7). Part IV covers domestic tenancies, and its defining feature today is what it no longer does: the Landlord and Tenant (Consolidation) (Amendment) Ordinance 2004 removed security of tenure for tenancies created on or after 9 July 2004. A domestic tenant has no statutory right of renewal and no rent control. The agreement, not the Ordinance, settles the term, the rent and the exit, which is why a thin two page form causes so much trouble here.

Two formalities sit on top of the contract. The first is stamping. Duty is chargeable under Schedule 1 to the Stamp Duty Ordinance (Cap. 117) by reference to the term: 0.25 per cent of the total rent where the term does not exceed one year, 0.5 per cent of the yearly or average yearly rent for a term over one year and up to three years, and 1 per cent beyond that, plus a small fixed duty on each counterpart. The agreement must be stamped within 30 days of execution, and the commencement date of the tenancy has no bearing on that deadline. Section 9 exposes late payers to a penalty of up to ten times the duty, and section 15 makes an instrument that is not duly stamped inadmissible in civil proceedings, so a landlord holding one cannot sue on it. The Inland Revenue Department guidance on stamping a tenancy agreement and the 30 day deadline sets out the e-stamping route.

The second formality is the Notice of New Letting or Renewal Agreement, Form CR109, which Part IV of Cap. 7 obliges the landlord to lodge with the Commissioner of Rating and Valuation within one month of entering into or renewing a domestic tenancy. A landlord whose Form CR109 has not been endorsed cannot maintain an action to recover rent under the agreement. Late lodgement remains possible on payment of a fee. Subdivided units follow separate regimes that a domestic form does not address: Part IVA of Cap. 7 has controlled those tenancies since 22 January 2022, and the Basic Housing Units Ordinance (Cap. 658) has been in force since 1 March 2026.

Most users reach for this template at a fresh private letting, once the flat has been viewed, the rent agreed and the agent is pressing for signature. Renewal is the second trigger. Landlords often let a tenancy roll on informally after the fixed term expires, which turns it into a periodic tenancy on uncertain terms and leaves the deposit sitting on a lapsed document. A fresh agreement, freshly stamped, with a fresh Form CR109, closes that gap. Corporate lettings are the third pattern: the company signs as tenant, a named employee occupies, and the employer keeps the stamped copy to support the treatment of the rent under salaries tax. Name the occupier, or the tenancy and the housing benefit records will not line up.

Two edge cases deserve a flag. A charity or an incorporated society taking a flat as staff quarters needs its signing authority to match its own constitution, a governance point before it is a property one, and our society constitutions and charity governance papers cover that side. The other is the subsidised sale flat with the premium unpaid, where letting is an alienation prohibited by the Housing Ordinance (Cap. 283).

• The identification of the parties and the premises carries more weight here than most people expect. Individuals are named with their identity document, companies with their registered name and business registration number, and the flat by unit, floor, block and estate, with any car parking space let alongside.
• The term and break clause are drafted as one fixed term of two years with a right to determine on written notice at or after the twelve month point. The clause states who may serve, how much notice is required, how service is effected and whether rent already paid is apportioned on early departure.
• The rent and deposit provisions fix the payment date and method and treat the deposit as an earnest of performance. Two months rent is the settled domestic norm. What may be deducted, and when the balance comes back, is the most litigated point in small tenancy disputes.
• The outgoings clause allocates rates, Government rent, management fees payable under the deed of mutual covenant and the Building Management Ordinance (Cap. 344), utilities and any air conditioning charge, with apportionment on the first and last day of the term spelled out.
• The repairs and reinstatement clause leaves structural and external repairs with the landlord and internal upkeep with the tenant, subject to fair wear and tear. Reinstatement of alterations is expressly stated, measured against the condition report taken on entry.
• The covenants and forfeiture provisions bar assignment, subletting, illegal use and unauthorised building works, oblige the landlord to give quiet enjoyment, and allow re-entry on breach, subject to relief under section 58 of the Conveyancing and Property Ordinance (Cap. 219).

Private residential flats across Hong Kong Island, Kowloon and the New Territories are the standard case, and the template is drafted for them. What differs by district is practical rather than legal: management fee levels, whether rates and Government rent are quoted inclusive or exclusive, and whether the deed of mutual covenant restricts pets. Read that deed before promising anything.

Village houses in the New Territories need a closer look before signature. Many carry rooftop or ground floor structures never covered by an occupation permit, and under the Buildings Ordinance (Application to the New Territories) Ordinance (Cap. 121) a Buildings Department order can land on the property mid tenancy. Let the floor area that is lawfully there, not the area the tenant walks through.

Subsidised sale flats and public rental housing sit outside this template. Letting a Home Ownership Scheme flat before the premium is paid is void and criminal under the Housing Ordinance (Cap. 283), and subletting a public rental flat counts as an abuse of public housing resources. The Housing Authority's pilot letting scheme, open to owners of ten years or more on payment of a letting permit fee, is the narrow exception.

Subdivided units fall under Part IVA of Cap. 7 as regulated tenancies, with four years of security in two consecutive two year terms, a cap on renewal rent increases pegged to the private domestic rental index, and a Notice of Tenancy on Form AR2 lodged within 60 days. The Basic Housing Units Ordinance (Cap. 658) adds registration and recognition requirements on floor area, ceiling height, ventilation and metering.

Serviced flats and short lets raise a licensing question, since premises let for periods shorter than 28 days generally fall within the Hotel and Guesthouse Accommodation Ordinance (Cap. 349), which a domestic tenancy agreement does not answer.

You begin by choosing whether landlord and tenant are individuals or companies, since that decides the identification fields and the execution block. The form then takes the property details, the term and the shape of the break clause, where you set the earliest date notice may be given and the notice period agreed. Rent, payment date and deposit follow, with any rent free or fitting out period. The outgoings section allocates rates, Government rent, management fees and utilities line by line, and the furniture schedule records what stays in the flat. The document downloads in Word and PDF, so you can adjust wording before signature or print it as it stands. Print two counterparts, have both signed before a witness, send them for stamping and lodge the Form CR109. A company tenant usually also needs a board resolution from our Hong Kong corporate and commercial documents, and an owner abroad signs through one of our powers of attorney and authorisation letters.

The costliest mistake is stamping a 1+1 tenancy as though it were a one year letting. The Stamp Office looks at the fixed term, not at the break right, so a two year agreement attracts the higher rate from the outset and a shortfall found later carries a penalty. Close behind is the forgotten Form CR109. Landlords remember stamping because the agent chases it, then discover at the first rent default that the claim cannot proceed until the notice is endorsed. Third is a break clause that names a notice period but says nothing about who may serve it, how service is effected, or what happens to the deposit.

Two others recur. Deposits are withheld against damage nobody documented, because no condition report or photographs were taken at handover, and the tenant's account of the flat becomes as credible as the landlord's. And employers arranging staff accommodation sometimes sign in the employee's own name while paying rent from the company, which undermines the housing benefit treatment and leaves the company with no standing over the flat. Fix the party names at the outset, alongside the employment contracts and staff documentation behind the arrangement.