Housing Issue in Retirement Planning

Our Wealth Management Team

Debbie Lee, Cassidy Lam, Johnny Chan & Alan Chan

Contents:

1. Our Company Introduction 2. Your Personal Information 3. Your Objectives 4. Executive Summary 5. Alternative Housing Options 6. Analysis Recommendations 7. Estate Planning and Tax Implication on Housing

Company BackgroundChartered Financial Consultancy Services Ltd

(ChFC Ltd)

We provide comprehensive fee-based wealth management services to corporate executives, professionals, business owners and other affluent clients.

We utilize a team approach in analyzing and planning a client’s investment portfolio, estate plan, income taxes, and retirement.

Company Background Our professionals include Certified Financial

Planner (CFP) & Chartered Financial Practitioner (ChFP) licenses with wealth of experience in planning and investment experience. All are registered license holders of Hong Kong Federation of Insurance (HKFI), the Securities & Futures Commission (SFC) & active members of The Institute of Financial Planners of Hong Kong, and other professional organizations.

Company Background Our Services FeesThere is one-time fee of $5,000 charged

for this initial plan development which includes:

Business Planning Tax Planning Investment Analysis and Strategies Retirement Planning Education Planning Insurance Planning Estate Planning

Personal Information

Your Present PositionName: Mrs. Tang, age 66, retireeSpouse:Mr. Tang King Shing, age 66, retireeProperties:(1) Primary HomeAn apartment at Reclamation St, Mongkok, Kowloon

(mortgage free)(2) Vacation HomeAn apartment at Clifford Estate, Panyu, China (mortgage free) Family Background:Having one son, married with a 2-year old boy, living in an

apartment at Part Oasis, Tai Kok Tsui, which is big enough to accommodate with the parents

Your Present PositionCurrent Financial Situation:(1) Primary home at Reclamation St, market

value HK$3M(2) Vacation home at Clifford Estate, market

value HK$0.8M(3) Cash on hand HK$2M

Risk Tolerance:A conservative investor & firm believer with

traditional concept of buying property is the most safety asset protector

Executive Summary

Executive SummaryYour Current Major Concern – Housing

Issues

The decision of where to reside during retirement

Whether or not to move into another living arrangement

Or cling to your primary home

Executive SummaryIssues that make you worry: The aging problem Health deterioration May need homecare ranging from meal preparation to

housekeeping work Need modifying the house to make it safer if staying in

the primary home Increasing house & building maintenance costs of the

primary home Seek assistance in case of emergency Is staying in the home a realistic and satisfactory long-

term option?

Executive SummarySolution & Recommendation:

A wise decision to live together with your son’s family:

1. Their home is big enough to accommodate both of you

2. They can take care of you two3. Enjoy more time with the son’s family & have fun with

your beloved grandchild4. Reduce housekeeping work5. Save the cost on modifying the primary home &

ongoing maintenance fees

Executive Summary By moving into your son’s place:

Sell your primary home,

Buy another property at Park Oasis closes to your son’s residence for rental purpose, with full payment from your cash account

Generate an additional retirement income

Executive Summary

Enjoy travel & freedom of life

You & your family can travel & stay at Clifford Estate whenever there are long holidays

Client’s Objective

Client’s Objective

1. The “Housing Issues” for retirement planning

1.1 Housing Options

2. Estate planning on housing issue

Alternative Housing Options

a. Clients remain in their exiting home b. Senior Citizen Residence Scheme c. Elderly Home organized by Private Organization d. Reverse Mortgages e. Buy a new home f. Relocation out of Hong Kong to China g. Living with family members

Analysis Recommendation

Disadvantage of staying in the existing apartment   -40 years old -Maintenance cost -Need someone to take care -Need to modify the house for elderly -Need high cost to stay in this apartment   Recommend to move in with their son’s family.

Analysis Recommendation

The advantage of move in with their son’s family   -Big enough to accommodate them -Take care of Mr. and Mrs. Tang -Happy to live with three generation together -Save cost and house keeping work -Can rent out the vacant apartment

Analysis Recommendation

Should Mr. and Mrs. Tang rent out the existing apartment?   -low rental income -hard to find tenant

Analysis Recommendation

Buying a new one in Park Oasis   -Rental income for around $16,000 to $18,000 -Close to where his son lives

Analysis Recommendation

Why don’t they invest in mutual funds or stocks instead of buying property for rental income?

  -No knowledge of Investment -Conservative in risk taking, have low return too -Chinese old folks like to invest in property

Estate Planning for China Property

Making a will in Hong Kong

Tax Implication in China

-2% 公証費 -Regular property transaction taxes -Extra 20% tax for resell

eg. 原房產証價 RMB 1M 現登記價 RMB 1.5M

  Extra Tax 20% x 1.5M=RMB

300,000

税费征收表

序号

税收项目 计算基数 收取对象 比例 征收部门

1 营业税 现登记价①或（现登记价—原房产证价）② 卖方 5% 登记机关代征

2 城市建设维护税 营业税 卖方 1% 登记机关代征

3

*

印花税 现登记价 卖方 各 0.05% 登记机关代征

买方

4 教育附加税 营业税 卖方 3% 登记机关代征

5 所得税 现登记价—原房产证价 卖方 20%（个人） 登记机关代征

15%（公司）

6

*

契税 现登记价 买方 1.5%或 3% ③ 登记机关代征

7

*

登记费 买方 50元（个人）

80元（公司）

登记机关代征

8

*

印花税票 买方 5元 登记机关代征

9

*

交易费 建筑面积 卖方 3元/平方米 登记机关代征

买方 3元/平方米

1

0

土地使用费④ 卖方 登记机关代征

1

1

土地增值税 现登记价—原房产证价 卖方 30%—60% 登记机关代征

1

2

公证费（涉外） 现登记价 境外方 0.3% 登记机关代征

说明：A：①住宅是按照这个基数（5年之内交易就一定要缴纳）；②商业（包括写字楼）是按这个基数

③契税: 144平方米以下的普通住房为 1. 5%;其他为 3%

④土地使用费:商业一定要交;用来出租的住宅也要交

B：有营业税就一定有城市建设维护税、教育附加税

C： 香港人可以在深圳买一套自住的住宅；香港个人不可以买商业楼宇，但是境外的公司在深圳有分支机构就可以买一套自用，或在国内注册的内资公司就可以买多套

D：带*号的在任何情况下都要交

營業稅 5% x RMB 1.5M=RMB 75,000 

城市建設維護稅 1% x RMB 75,000=RMB 750 

印花稅 0.05% x RMB 1.5M=RMB 750

教育附加稅 3% x RMB 75,000=RMB 2250

所得稅 RMB 1.5M – RMB 1M=RMB 0.5M20% x 0.5M= RMB 100,000

交易費 144 平方米 x RMB 3=RMB 432

土地增值稅 RMB 1.5M – RMB 1M=RMB 0.5M30% x RMB 0.5M=RMB 150,000

公証費 ( 涉外 ) 0.3% x RMB 1.5M=RMB 4500

Total Tax==RMB 633,682

Estate Planning in Hong Kong

a. Real Estate: Joint Tenancy

b. Distribution of remaining asset - All personal chattels: Spouse - Surviving spouse: $500,000 - The remainder: $500,000; equal share

c. Should write a will

d. Role of executor

e. Life Insurance Policy Proceed

Action Plan To exercise the above recommendation, an action plan is suggested as follows:

Item under action To be completed by from date of submission of this financial plan

Party at action

Sell the Reclamation St Property

1-2 months You and Real Estate Agent

Buy the Park Oasis Property 2 months – Half year You and Real Estate Agent

Prepare Will to accommodate Estate Planning need in China

1 month You and our referred Legal Advisor in China

Prepare Will to accommodate Estate Planning need in Hong Kong

1 month You and our referred Legal Advisor in Hong Kong