Hong Kong Commercial Lease Guide

Commercial Lease Guide for Hong Kong

A practical, tenant-focused guide to Hong Kong commercial leases — not legal advice.

Last reviewed: May 26, 2026 by the BizLeaseCheck Editorial Team

Not legal advice. Use this as a checklist and discuss with a qualified professional.

What to know before you sign

Hong Kong distinguishes legally between a "tenancy" (3 years or less) and a "lease" (more than 3 years) — the distinction drives stamp duty rates, registration requirements at the Land Registry, and the formality of execution under the Conveyancing and Property Ordinance.

Hong Kong tenants need to plan for stamp duty on the lease (0.25–1% scaled on average annual rent plus HK$5 per counterpart), monthly management fee paid to the building manager, government rent and rates billed quarterly by the Rating and Valuation Department, and reinstatement to original condition at expiry.

Major markets

Where commercial activity concentrates.

Central
Admiralty
Causeway Bay
Tsim Sha Tsui
Kowloon Bay
Quarry Bay

Common lease types

Typical structures and what to watch.

Tenancy agreement (≤3 years — no Land Registry registration required, simpler execution)
Lease (>3 years — must be by deed, registrable at Land Registry)
Sub-tenancy (head landlord consent required; deemed reversion risk)
Service apartment / serviced office licence (not a tenancy — different protections)

Cost drivers

Items that often create surprise bills.

Base rent (HK$ per sq ft per month on gross / lettable area)
Management fee (paid to incorporated owners or manager — covers common area, security, M&E)
Government rent (3% of rateable value, payable quarterly to RVD)
Rates (5% of rateable value, payable quarterly to RVD)
Stamp duty on the tenancy/lease (0.25%–1% scaled + HK$5 per counterpart)
Reinstatement to original condition at expiry
Security deposit (typically 2–3 months rent + management fee)

Key things to watch in Hong Kong

Lease structures and statutory protections vary by country. Here are top issues we see for tenants in Hong Kong:

Tenancy vs lease (under/over 3 years)

Hong Kong distinguishes a "tenancy" (term ≤ 3 years) from a "lease" (term > 3 years). Leases must be by deed and registered at the Land Registry; tenancies have lighter formalities. The distinction affects stamp duty calculation and assignability.

Stamp duty

Stamp duty on commercial tenancies is charged on annual rent (0.25–1% depending on term length). Both parties are jointly liable; usually paid 50/50. Budget at signing.

Management fee and government rent

Management fees (typically HKD 3–8/sqft/month) are passed through for building services. Government rent (3% of rateable value) and rates are usually tenant-paid. Confirm allocation in the lease.

Reinstatement and security deposit

Reinstatement to original condition is standard at end of term. Security deposits of 2–3 months rent are typical. Negotiate security deposit return timing (often 30–60 days post-vacate).

Negotiation checklist

Tenancy vs lease — pick the right structure

A tenancy of 3 years or less avoids the formal "lease by deed" requirement under section 4 of the Conveyancing and Property Ordinance and avoids Land Registry registration. For longer terms, factor in the additional formality and cost.

Stamp duty timing and split

Stamp duty must be paid within 30 days of execution to the Stamp Office. It is conventionally split 50/50 between landlord and tenant but the parties can agree otherwise — confirm in the agreement.

Government rent and rates — who pays?

Government rent and rates are billed to the registered owner by the Rating and Valuation Department, but the lease usually passes them through to the tenant. Confirm this is explicit and budget for quarterly demand notes.

Cap or fix the management fee

Management fee is typically reviewable. Ask for a cap or fixed annual escalation, and request sight of the latest management accounts. Avoid open-ended pass-through of major repairs that are really the building owner's capital cost.

Reinstatement to original condition

Hong Kong leases typically require reinstatement to original condition. Attach photographs of the premises at handover, list any fitout you are taking from the previous tenant, and consider negotiating a cash settlement at exit.

Right of renewal / right of first refusal

There is no statutory renewal right since the repeal of Part IV of the Landlord and Tenant (Consolidation) Ordinance for new tenancies post-2004. If you need security beyond the term, negotiate an option to renew or a right of first refusal expressly.

Sub-letting and assignment consent

Require landlord consent not to be unreasonably withheld and avoid a blanket prohibition. For corporate tenants, push back on change-of-control clauses that treat a sale of shares as a deemed assignment.

Common landlord traps

Uncapped pass-throughs / outgoings: Operating costs, taxes, and insurance can rise year-to-year without a cap unless negotiated.
End-of-term reinstatement / make-good / dilapidations: Costs can be substantial; negotiate a Schedule of Condition or carve-outs.
Notice deadlines: Renewal, break, and option rights typically depend on strict written notice windows — calendar at signing.

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Official resources

Land Registry of Hong Kong GovHK — business and lease information Rating and Valuation Department Inland Revenue Department — stamp duty

Other regions

Frequently asked questions

What is the difference between a tenancy and a lease in Hong Kong?

A tenancy is a term of 3 years or less, can be created informally and does not require Land Registry registration. A lease is a term of more than 3 years, must be created by deed under section 4 of the Conveyancing and Property Ordinance, and should be registered at the Land Registry within 30 days to preserve priority.

How much is stamp duty on a Hong Kong commercial tenancy?

Stamp duty is calculated on average annual rent: 0.25% for terms of 1 year or less, 0.5% for terms over 1 but not exceeding 3 years, and 1% for terms over 3 years, plus HK$5 per counterpart. It must be paid within 30 days of execution.

Do I have a right to renew my Hong Kong commercial lease?

No statutory right to renew exists for commercial tenancies created after the repeal of Part IV of the Landlord and Tenant (Consolidation) Ordinance in 2004. Any renewal right must be expressly negotiated as an option in the tenancy or lease agreement.

Who pays government rent and rates?

The Rating and Valuation Department bills the registered owner quarterly, but commercial leases almost always pass these costs through to the tenant. Government rent is 3% of rateable value; rates are 5%. Confirm the pass-through is explicit in the lease.

Does BizLeaseCheck provide legal advice?

No. It helps you spot common risks and compare leases quickly, but it is not legal advice. Use it alongside a Hong Kong-qualified solicitor for your situation.