Hong Kong: Worked Example of Tax on Rent
Country Rating » 
In Depth
- Overview
- Price History
- Rental Yields
- Taxes and Costs
- Tax on Rent (Example)
- Buying Guide
- Landlord and Tenant
- Inheritance
- Living There
- Useful Links
- Country Statistics
Directory
Global Statistics
Regional Statistics
- Sq. M. Prices
- Rental Yields
- Rents
- Price/Rent Ratio
- Buy/Sell Costs
- Rental Income Tax
- Capital Gains Tax
- Price Change 1 yr
- Price Change 5 yrs
- Price Change 10 yrs
- Landlord & Tenant Law
- GDP Per Capita
- GDP/Cap Growth 1 yr
- GDP/Cap Growth 5 yrs
- Economic Freedom
- Ec. Freedom 5 yrs
- Competitiveness
- Property Rights Index
- Currency +/- Value
Tax Example: Rent
| Non-resident couple's joint monthly rental income1 | US$1,500 | US$6,000 | US$12,000 | |
| Annual Rental Income | 18,000 | 72,000 | 144,000 | |
| Less: Rates paid by the owners2 | (900) | (3,600) | (7,200) | |
| = Assessable Value | 17,100 | 68,400 | 136,800 | |
| Less: Standard allowance for repairs and outgoings (20%)3 | (3,420) | (13,680) | (27,360) | |
| = Taxable Income | 13,680 | 54,720 | 109,440 | |
| Income Tax Rates | ||||
| Standard rate | 16%4 | 2,189 | 8,755 | 17,510 |
| Annual Income Tax Due | US$2,189 | US$8,755 | US$17,510 | |
| Tax Due as % of Gross Income | 12.16% | 12.16% | 12.16% | |
Thanks to: |
||||
DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on March 5, 2007.
Notes
Grant Thornton Hong Kong is a member firm of Grant Thornton International. Grant Thornton International is not a worldwide partnership. Member firms of the international organization are independently owned and operated.
1 The property is jointly owned by husband and wife.
2 Rates agreed to be paid and actually paid by the owner of the property are deductible for Property tax purpose. They are charged at a percentage of the rateable value which is the estimated annual rental value of the property at a designated valuation reference date. The current rates percentage for financial year 2006-2007 is 5%. In this case, the rateable values are assumed to be the same as the annual rental income generated by the properties.
3 The Hong Kong Inland Revenue Ordinance stipulates a flat rate of 20% on the assessable value (gross income less rates paid by the owners) as allowance deductible for repairs and outgoing expenses. No other expenses other than the rates paid by the owner, irrecoverable rent, and the 20% standard allowance can be deducted.
4 Property tax is imposed at a flat rate of 16%.
Post a comment
Subscribe to our Newsletter!
Enter your email address to sign up.
Your Comments
Be the first to comment!