Hong Kong Property Tax Guide (7) – Miscellaneous Items

Lum-sum Premium Received

 The lump-Sum premium received at the start of the lease period can be spread throughout the lease period up to a maximum of 36 months if the owner makes such an election.

 Government Rent and Rates

 The “rates paid by the owner” does not include government rent. In other words, the government rent levied in the rates bill is not deductible. To claim the rates deduction, it is advisable for the property owner to keep all the rates bill.

 Management Fees

 Where the tenant pays management fees through the landlord and such fee is not included as rent under the lease, the fee is not assessed able.

Election for Personal Assessment

 The landlord may reduce his tax liability by election for Personal Assessment which brings all his income including property income, salaries income and business income into a single assessment with deductions for married person allowance, child allowance, dependent parent allowance, etc. from the chargeable income. Besides, he can claim mortgage interest on loans for purchase of the property under Personal Assessment — such interest is not deductible under Property Tax.

 If the landlord has property income only, it is always advisable for him to elect for Personal Assessment. If he has other incomes, he can also make the election in the tax return because such election will not take effect if it is not to his advantage.