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Car Tax and Insurance

Hong Kong - Car Tax and Insurance

Insurance on your vehicle is necessary if you’re going to be driving in Hong Kong. All drivers must at least have third-party car insurance. However, there are also comprehensive coverage plans available as well. Comprehensive plans might cover extra options such as car rental if your vehicle is damaged and you aren’t able to drive it, locksmith services if you lock your key in your car, and roadside assistance. If you do not at least purchase a third-party policy then you can be subjected to large fines, up to twelve months in prison, and/or a 1-3 year driving ban.

There are many insurance companies in Hong Kong that offer car insurance policies. To see a list of these, you can visit the:

Motoring Insurers’ Bureau
Room 902, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong
Tel: (852) 2866 9681
Email: mib@mibhk.com.hk

The First Registration tax is the important tax that is placed on a vehicle when you purchase it. The tax varies and is based on the value of the vehicle. For instance, on the first HK$150,000 of taxable value of private cars, the tax rate is 40%; on the next HK$150,000, the rate is 75% on the next HK$200,000, the rate is 100%; and on taxable value over HK$500,000, the rate is 115%.

Normally, the registered motor vehicle distributor will apply for the registration and licensing of a new vehicle from the Transport Department on behalf of its customer. Once the vehicle has been successfully registered, it will be assigned with a registration mark. A vehicle license will then be issued to the registered owner. This is required to be displayed on the left side of the vehicle’s windscreen. If it does not have a fixed windscreen then the license must be displayed in a noticeable position on the left side of the vehicle. The owner must renew his/her vehicle license either once a year or every 4 months. A tax must be paid even if your purchase your vehicle secondhand. The annual “Vehicle License” fee is mandated to keep your vehicle registered. The cost is factored upon the engine capacity: HK$3,929 not exceeding 1,500 c.c; HK$5,794 exceeding 1,500 c.c. but not exceeding 2,500 c.c.; HK$7,664 exceeding 2,500 c.c. but not exceeding 3,500 c.c.; HK$9,534 exceeding 3,500 c.c. but not exceeding 4,500 c.c.; and HK$11,329 exceeding 4,500 c.c.. You can find out more information here: http://www.td.gov.hk/en/public_services/fees_and_charges/index.html#vehicle

In order to encourage the use of vehicles that are environmentally friendly, the Customs and Excise Department has a concession of the First Registration Tax to the first registered owners of environmentally friendly vehicles that meet the requirements of the tax incentive schemes.

Once a vehicle becomes six years old, it must undergo an annual vehicle examination before it can be re-registered. This costs HK$530 per year. There are several vehicle examination centers located throughout Hong Kong. For more information regarding the annual vehicle examination, the cost, and the locations please visit: http://www.td.gov.hk/en/public_services/vehicle_examination/vehicle_examination/index.html#2.2

For general information regarding vehicle taxes, driving rules, and licensing, you can visit the Department of Transport’s website.

Transport Department
Tel: (852) 2804 2600
Email: tdenq@td.gov.hk

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