Property Tax in Hong Kong

  • Computaton of property tax
  • Statutory deduction
  • Selection to be taxed under profits tax
  • Selection to be personally assessed

 


 

Computation

Property tax is imposed by reference to the gross rent received or receivable (the assessable value, AV) after deducting rates if the landlord bears the rates of the leased property, and from the assessable value a 20% flat-rate statutory deduction is subtracted. The amount of AV after the 20% statutory deduction is the net assessable value (the NAV), which is taxed under a two-tiered rate system as below:

  • for the first HK$2,000,000 of the NAV, at a reduced rate of 7.5% for individual taxpayers and 8.25% for companies;
  • for the remaining part of the NAV, at 15% for individual taxpayers and 16.5% for companies.

 

Statutory deduction

The Inland Revenue Ordinance provides for a deductible allowance of 20% on the net assessable value for repair and maintanance purposes, regardless of whether any amount of repair and maintenance has been incurred in the year of assessment.

 

Selection to be taxed under profits tax

A company that owns a property for the earning of rental income can select to be taxed under profits tax. However, the selection is only available for corporate owner of the property.

 

Selection for personal assessment

An individual taxpayer who is liable to property taxes can select to be assessed personally so that the individual taxpayer can be eligible for the amount of allowance (such as personal allowance or married couple allowance) that would otherwise be available to salaries taxpayers.