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A Checklist for Reduction of Property Tax

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A Checklist for Reduction of Property Tax

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.

Have you borrowed money to purchase the property and paid interest? If yes, you may elect for personal assessment to claim deduction of interest.

Do you include rent deposits in your rental income? If yes, you should exclude them from the assessable value.

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.

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
- https://www.ird.gov.hk/eng/pdf/pam55e.pdf
- https://www.ird.gov.hk/eng/pdf/pam54e.pdf
- https://www.gov.hk/en/residents/taxes/property/propertyincome.htm
- https://www.ird.gov.hk/eng/pdf/dipn14.pdf

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