Purchasing TPS flats is simple and easy. Sitting tenants who are interested in buying occupying flats are required to note the following:
Submission of Application Form
Completed application forms should be submitted to relevant estate offices during office hours. When submitting application forms, applicants should bring along the following:
- Letter of Offer (two copies)
- Schedule to Letter of Offer (two copies)
- Cashier order of $2,500 as Intention Money
- Original copy of Tenancy Agreement
- Copies of Hong Kong Identity Cards of all members included in the application form
- Undertaking to forfeit other public housing benefits (if applicable)
Withdrawal or Amendment of Application Form Submitted
If a purchaser withdraws his / her Letter of Offer before the acceptance, he / she will get full refund of the Intention Money. No Intention Money will be refunded for any withdrawal made after the acceptance. After an offer is accepted by the HA, a binding contract has been entered into between the two parties. Any application for changes in the terms and conditions, including change in the purchaser, will be treated as a "rescission" of the contract and thus leading to forfeiture of the Intention Money. Under such circumstances, the new purchaser is required to submit a new application and pay another sum of Intention Money.
Special Credit Discount for Purchase of Flats by Sitting Tenants
Under the established policy, sitting tenants of TPS may enjoy a discount (“special credit”) of 35% if they purchase their flats in the first year of tenancy; and a 17.5% discount in the second year of tenancy. No further discount is given from the third year onward. In order to encourage TPS sitting tenants to purchase the flats they are residing, the HA provides a 17.5% discount for one year starting from 1 September 2020 to sitting tenants who no longer enjoy any discount (i.e. those who are in their third year of tenancy onward) and allowing the sitting TPS tenants, if they so choose, to rescind the transactions that are in progress without forfeiting the intention money already paid to HA so that a new transaction under the newly introduced discount can be made to buy the flats in which they reside.
Submission of Multiple Applications
Each household could serve one Letter of Offer only (except for one nuclear family living in two units). Households renting two housing flats will be required to submit two sets of Letters of Offer.
Households occupying more than one public housing flat can purchase a maximum of two flats under the same purchaser only and must surrender the remaining, if any. Households comprising more than one nuclear family can purchase two flats under the same owner / joint-owners or apply for splitting in order to purchase two flats under a different owner / joint-owners or purchase one flat and retain the other(s) for rental, provided that the following criteria concerning splitting are fulfilled:
- The split off group has to be a whole nuclear family;
- The flat to be purchased must be physically separated from those retained for rental;
- The prevailing splitting criteria must be fulfilled;
- Approval from the Estate Office must be sought before submission of the Letter of Offer.
Intention Money Paid at the Submission of the Application Form
The purchaser shall pay an Intention Money of $2,500 by using cashier order payable to the "Hong Kong Housing Authority" when he / she submits his / her offer. If the purchaser is found not eligible for purchasing the flat, the Intention Money paid will be refunded. Under no circumstances will the Intention Money earn any interest.
Registration Fees and Legal Costs
Purchasers will need to pay, apart from the price of the flat, the stamp duty, registration fees and legal costs. The stamp duty for the flat is subject to the final assessment by the Inland Revenue Department based on the value of the property for stamp duty purpose whereas the registration fee is currently $230 (if the amount or value of the consideration of the flat exceeds $750,000, the registration fee is $450) for each Assignment. The legal costs will depend on the rate charged by the purchaser's appointed solicitor. However, if the purchaser chooses to be represented by the HA's solicitor, he / she needs to pay the legal fees agreed between the HA and the appointed solicitor. Information is available at the estate office for the legal fees charged by the HA's solicitor.
Obtain a Mortgage Loan
The HA has entered into a Deed of Guarantee with a number of banks and financial institutions to provide mortgages of up to 100% of the balance of the purchase price of the flat, i.e. the actual purchase price less the intention money paid, for up to 25 years. If the purchaser of a TPS flat, who has mortgaged the flat purchased to a participating financial institutions that has entered into a Deed of Guarantee with the HA, defaults on mortgage payments before paying off the mortgage loan, the financial institution concerned will sell the flat. Should the sale proceeds of the flat fail to cover the full outstanding balance of the mortgage and all the interest, the legal costs, administration fees, etc. payable under the mortgage, the financial institution will, pursuant to the Deed of Guarantee, make a claim against the HA for the payment of all the above arrears that the purchaser owes. The HA shall then under the Deed of Guarantee pay the same to the financial institution. In relation to the payments made by the HA to the financial institution, the HA will then recover such payments and the interest from the purchaser.