Financial Literacy for Everyone
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Buying a Home

As your savings plan bears fruit, giving you enough capital for a down payment on a desirable property, you are in a position to choose whether to purchase your own home, or continue renting. It is one of life's biggest decisions, with many things to ponder.

To Own or Not to Own
Home ownership is not for everyone. It is definitely a long-term commitment. With all the financing, transaction costs and other expenses associated with owning a home, it may take years before you could realize a financial gain from a purchase.

You also have to think about the upkeep of a home. Everything from lighting to window frames will be your responsibility. The costs can really add up. Then add rates, water bills and other expenses and you can get into some sizable payments.

But when you take full financial and maintenance responsibility for a home, it is yours to do what you please. Paint the walls purple. Replace your kitchen cabinets. You are in charge.

There may be financial advantages to owning a home. The part of your monthly mortgage payment that goes toward the principal is all equity and the part that goes toward interest can be tax deductible in Hong Kong.

As your equity increases with time it will be a source of financial stability for you, giving you collateral for a loan or producing a large sum of money if you sell. However, when you sell your home, you may be liable to pay some stamp duties if the duration of ownership is below certain thresholds. Please check with the government or real-estate agents on whether you have owned your home long enough for stamp duties to be waived.

Source: GovHK