Apart from rental income, do you earn assessable salaries income and/or business income? If yes, you may reduce your tax by electing Personal Assessment.
2.
Have you borrowed money to purchase the property and paid interest? If yes, you may elect for personal assessment to claim deduction of interest.
3.
Do you include rent deposits in your rental income? If yes, you should exclude them from the assessable value.
4.
Have you received lump-sum premium? If yes, in general, the amount shall be included in the assessable value of the property in the year of commencement of the lease concerned. However, if the period of the lease is not contained within any one year of assessment, the lease premium can be spread over the period of the lease or a period of 36 months, whichever is shorter, in order to reduce tax.
5.
Do you pay management fee on behalf of the tenant to the management service provider? If yes, but it is provided in the tenancy agreement that the tenant is responsible for the payment of the management fee, then such fee received from the tenant is not assessable.
The checklist provided is for general guidance only. Indeed the above guidelines are subject to various conditions laid down in the Inland Revenue Ordinance, as well as the judgments made in court and Board of Review cases.
Source：Hong Kong Inland Revenue Department’s website
All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.
The disposition of a U.S. real property interest by a foreign person (the transferor) is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding. FIRPTA authorized the United States to tax foreign persons on dispositions of U.S. real property interests.
The assessable value is computed by reference to the actual consideration 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, services charges and management fee paid to the owner, and owner’s expenditure (e.g. repairs) borne by the tenant.
Hong Kong property tax is levied annually on the owner(s). If the property is owned by two or more persons, tax assessment will be in the name of joint-owners/co-owners and liability to pay Hong Kong property tax and provisional property tax is joint and several.Rates are tax levied on the occupation of property and are charged at a percentage of the rateable value of the property.
Section 5 of the Hong Kong Inland Revenue Ordinance (“IRO”) levies property tax on the property owner in respect of the rental income of his land or buildings or land and buildings in Hong Kong. In general, the tax will be equal to: (Rental income less rates paid by owner and irrecoverable rents) x 80% x Standard rate.
