HONG KONG PROPERTY TAX
The Scope of the Charge
Property Tax is charged on
the owners of land and/or buildings in Hong Kong and is computed
at the standard rate of 15% on the net assessable value of
the property.
The Basis of Assessment
The assessable value is computed by reference to the actual
rental income payable to the owner in respect of the right
of use of the property. Examples of consideration to be included
in the assessable value are rent, payment for the right of
use of premises under licence, lump sum premium, service charges
and management fee paid to the owner, and owner's expenditure
(e.g. repairs) borne by the tenant. The net assessable value
is the assessable value (after deduction of rates paid by
the owner) less an allowance of 20% for repairs and outgoings.
Deductions Allowed
The following items can be claimed as deductions:-
| (1) |
Rates if the owner is responsible
for the payment of rates of the property; |
| (2) |
Consideration chargeable to tax which has
become irrecoverable during the year of assessment (sums
so deducted as irrecoverable rent and later recovered
should be included in arriving at the assessable value
in the year of recovery); |
| (3) |
A 20% notional allowance for repair and
outgoings. This is a flat rate deduction irrespective
of the actual amount spent and is to be given after deduction
of rates and irrecoverable consideration. |
Note: No other expenses are allowable
for Property Tax purposes.
Properties for Owner's Business Use
If the income from property chargeable to Property Tax is
included in the taxpayer's profits for Profits Tax purposes,
or if the property owned by the taxpayer is occupied by him/her
for business purposes, the amount of Property Tax paid may
be deducted from the amount of Profits Tax assessed. Corporations
carrying on a trade, profession or business in Hong Kong,
on application made in writing to the Commissioner, may be
exempt from paying the Property Tax which would otherwise
be set off against their Profits Tax. |
