In Hong Kong, property tax is a big deal for property owners. This article breaks down everything about Hong Kong's property tax, like how it's calculated, the tax rates, and exemptions, to help owners handle their property taxes better and save smartly.
Property tax is the tax on rental income from land, buildings, or parking spaces in Hong Kong.
Only owners of rented properties pay this tax. If you live in your property, you don't pay property tax.
The property tax rate in Hong Kong is 15% of the net rental income for the year, which runs from April 1 to March 31 the next year. Net rental income is your yearly rent minus rates, irrecoverable rent, and repair costs. The tax office automatically deducts 20% from the net rent as a standard exemption for repair costs. You can use the official property tax calculator to estimate.
The Inland Revenue Department (IRD) sends out property tax forms usually on the first working day of April each year. Owners need to fill out the “Property Tax Return for Jointly Owned Properties” (BIR57) form, providing details like rental income and deductions.
You have one month from when the form is sent to submit it. If you don't get the form, you can request to obtain a Duplicate Tax Return form.
The tax office assesses your property tax based on your return. Once assessed, you'll get a bill and should pay as instructed.
The Inland Revenue Ordinance offers personal assessment to tax relief for property owners. Owners of rented properties can get deductions for things like mortgage interest, personal allowances, and business losses in that tax year.
When renting out property, you can choose to report under ''Personal Assessment” instead of just paying property tax, which could give you more tax relief. If you're unsure, you can use the tax tools to calculate in advance.
To apply for provisional property tax deferment, owners must apply in writing 28 days before the tax is due or within 14 days of receiving the provisional tax notice, whichever is later. Conditions include:
Provisional property tax is paid in two installments, usually in November of the current year and April of the next year. You can download the Application for Holdover of Provisional tax form (IR1121) from the IRD website.
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