<div id="readability-page-1">Hong Kong’s de facto central bank said on Thursday it will allow most second-hand residential property transactions to be settled through direct bank transfers, giving homebuyers and sellers a faster and safer alternative to cheque-based payments. The Hong Kong Monetary Authority said the expanded Payment Arrangements for Property Transactions (PAPT) scheme would take effect on February 28, covering the bulk of resale home deals in the city. The announcement was made jointly with the Hong Kong Association of Banks, the Law Society of Hong Kong and the Estate Agents Authority. Under the arrangement, buyers can choose to have mortgage loan proceeds transferred electronically from their bank directly to the seller’s bank through the interbank payment system, instead of routing funds through lawyers’ client accounts. Sellers could receive the money as early as the completion date, and no additional fees would be charged for using the scheme, the HKMA said. Buyers and sellers who want to use the option can inform their property agent and add a clause to the provisional sale and purchase agreement. They may switch back to the traditional payment method up to eight working days before completion. HKMA deputy chief executive Arthur Yuen Kwok-hang said the arrangement would give buyers and sellers “a safer and faster payment option”, adding that the move reflected broader efforts to modernise payment practices in the property market.  Officials said the expansion would cover close to 90 per cent of resale residential transactions, focusing on mainstream deals with relatively simple structures. A pilot conducted in the third quarter of 2025 involving 10 second-hand transactions showed the arrangement was workable, the HKMA said. The scheme applies to second-hand residential property sales, including car parking spaces within residential buildings, as long as the transaction involves cash consideration only. Both buyers and sellers must be individuals or Hong Kong-incorporated property-holding companies, regardless of nationality. Properties must carry no more than one mortgage and have no restrictions on transfer. Buyers must obtain a Hong Kong-dollar mortgage from a local bank, while sellers must hold a Hong Kong-dollar bank account with a participating bank to receive the funds. Hong Kong has traditionally required property payments, including mortgage refinancing, to be held in escrow by law firms before completion, but the system has come under scrutiny in recent years following a series of law firm failures that left some homebuyers waiting extended periods to recover their funds. Lawyers will continue to handle conveyancing work such as title checks and contract execution, but mortgage funds will no longer pass through law firms’ bank accounts. The scheme does not cover commercial property transactions, first-hand residential sales or subsidised housing with unpaid premiums. Alan Au, executive director of banking conduct at the HKMA, said those segments involved more complex legal and financing structures and would require separate arrangements. There was no timetable yet for further expansion, he added.</div>

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<p>Hong Kong's Monetary Authority announced an expanded scheme allowing direct bank transfers for most second-hand residential property transactions, effective February 28. This initiative aims to provide a faster and safer payment method, covering nearly 90% of resale deals. Buyers can transfer mortgage funds directly to sellers' accounts, bypassing traditional cheque payments and law firm escrow. The scheme excludes commercial properties and first-hand sales, focusing on simpler transactions. The move reflects efforts to modernize property payment practices in Hong Kong.</p>

Expanded Hong Kong scheme allows resale homebuyers to pay sellers directly