Starting Feb 28, electronic payment options will be extended to the sale and purchase of secondhand residential properties in Hong Kong, which authorities say will provide a faster, safer and efficient choice to the payment process.

The Hong Kong Monetary Authority, the Hong Kong Association of Banks, the Law Society of Hong Kong, and the Estate Agents Authority jointly announced on Thursday expanding the Payment Arrangements for Property Transactions (PAPT) to cover the sale and purchase of secondary residential properties in Hong Kong. This initiative is also supported by the Consumer Council.

Under PAPT, the buyer's mortgage-loan proceeds will be transferred to the seller's bank through the interbank electronic payment system (CHATS), enabling the seller to receive the sale proceeds on the same day as the transaction completion day. For the conventional payment method, in which mortgage loan proceeds need to be settled via the solicitors' accounts using physical checks, the process usually takes two working days.

In November 2022, the HKMA rolled out PAPT for mortgage refinancing transactions of residential properties. Since its launch, more than 15,000 transactions completed using PAPT, and over 75 percent of eligible refinancing transactions opted to use PAPT over the past six months.

“Based on successful experience in the mortgage refinancing market, the HKMA and the HKAB have been studying how to extend PAPT to the sale and purchase of secondhand residential properties. But the discussion process is more complicated as the expansion involves more stakeholders: buyers and sellers, banks, solicitors and real estate agents,” HKMA Deputy Chief Executive Arthus Yuen Kwok-hang said at the ceremony.

He said the PAPT expansion marks an important milestone in Hong Kong's adoption of electronic payments and optimization of the residential property transaction process.

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Sun Yu, HKAB chairperson and Bank of China (Hong Kong) vice-chairman and chief executive, said the banking industry is fully prepared in terms of the PAPT operating system, processes and internal guidelines. The industry is providing extra training for front-line employees, as a series of publicity and education activities have been prepared.

In the third quarter of 2025, the HKMA launched the PAPT pilot program, in which selected banks participating in the program completed 10 cases of real-sale and purchase transactions in the secondary market using PAPT, covering different transaction scenarios based on different property locations, different property prices and different building ages.

Regarding the eligibility for using PAPT, both the buyer and the seller must be either an individual or a property-holding company incorporated in Hong Kong. The buyer must have a mortgage loan in Hong Kong dollars with a bank in Hong Kong, and the seller must have a Hong Kong dollar account in Hong Kong.

The property involved is subjected to no more than one mortgage loan, and is not subject to restrictions on alienation. The property transaction can involve only cash consideration.

“At this stage, PAPT is focusing on the mainstream secondary home market,” HKMA Executive Director (Banking Conduct) Alan Au said. “Property transactions involving commercial properties, new residential flats, subsidized housing with premium unpaid, and properties carry other transfer restrictions are not covered, since these transactions involve either different property uses, different mortgage payment mechanisms, or restrictions on ownership transfers.”

He added that the HKMA currently does not set any timeline to extend the PAPT arrangement for such property transactions.

“Last year, there were more than 40,000 secondhand residential property transactions. We believe the PAPT arrangement can cover nearly 90 percent of secondhand residential property transactions, as subsidized housing transactions account for about 10 percent,” Au said.

LSHK President Roden Tong said the PAPT arrangement is not mandatory. “Homebuyers and sellers can discuss the most appropriate handling method with their lawyers based on the specific transaction details and amount. Bank draft settlements and check settlements at law firms can still be carried out.”

Juliet Leung, EAA director of regulatory affairs and general counsel, said that the EAA will send a circular to real estate agents reminding the industry that PAPT is an alternative payment method besides existing payment arrangements, and whether to use PAPT is a joint decision of the buyer and seller.

Under the PAPT arrangement, buyers or sellers can make the changes regarding the payment arrangements by notifying solicitor and banks within eight working days before the completion of the property transaction.