Guide to Property Taxes in Hong Kong
Tax Rate on Rental Income |
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| Monthly Income | US$1,500 | US$6,000 | US$12,000 |
| Tax Rate | 2-17% | 2-17% | 2-17% |
Taxation in Hong Kong is based on the territorial source principle, meaning that only income earned within Hong Kong is taxed. Income derived from outside Hong Kong is not subject to Hong Kong tax. Married couples are assessed and taxed separately unless they elect for joint taxation.
The tax year in Hong Kong starts on April 1 and ends on March 31 the following year. For example, the tax year 2023-2024 runs from April 1, 2023, to March 31, 2024, and the tax year 2024-2025 runs from April 1, 2024, to March 31, 2025.
Income Tax
Taxable income in Hong Kong is classified into different categories, and the applicable tax rates depend on the income classification. When renting out a property, landlords pay property tax instead of income tax.
| Taxable Income (HKD) | Tax Rate (%) |
| Up to HKD 50,000 (US$6,401) | 2% |
| HKD 50,000 to HKD 100,000 (US$12,803) | HKD 1,000 plus 6% on the band over €30,000 |
| HKD 100,000 to HKD 150,000 (US$19,204) | HKD 4,000 plus 10% |
| HKD 150,000 to HKD 200,000 (US$25,606) | HKD 9,000 plus 14% on the band over €30,000 |
| Over HKD 200,000 (US$25,606) | HKD 16,000 plus 17% |
| Source: Global Property Guide, PWC | |
Capital Gains Tax
There is no capital gains tax in Hong Kong.
Property Buying and Selling Costs/Taxes
|
TRANSACTION COSTS |
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| Who Pays? | ||
| Property Transfer Tax | 0.10% - 4.25% | buyer |
| Legal Fees | 1.00% | buyer |
| Notary Fees | 0.75% - 3.75% | buyer |
| Real Estate Agent Fee | 0.50% - 1.00% 0.50% - 1.00% |
buyer seller |
| Costs Paid by Buyer | 2.35% - 9.00% | |
| Costs Paid by Seller | 0.50% - 1.00% | |
| ROUNDTRIP TRANSACTION COSTS | 2.85% - 10.00% | |
| Source: Global Property Guide, PWC, Deloitte | ||
Property Holding Tax
Income derived from renting out property is subject to property tax. Property tax is charged at a standard rate of 15% of the property’s net assessable value (NAV). The NAV is calculated as the assessable value (after deducting rates paid by the owner, if applicable, and irrecoverable rent), minus an allowance of 20% for repairs and outgoings, regardless of whether these expenses were actually incurred.
Property Tax Calculation
| Description | Calculation |
| [A] | Gross Rent |
| [B] Less: | Irrecoverable Rent |
| [C] | Assessable Value (A-B) |
| [D] Less: | Rates paid by owner(s) |
| [E] | (C-D) |
| [F] Less: | Statutory allowance for repairs and outgoings (E x 20%) |
| Net Assessable Value (E-F) |
Source: Gov.hk
Property tax is levied on the property owner, who is required to keep sufficient records of rent received, such as lease agreements, duplicates of rent receipts, receipts for rates, and correspondence related to lease term modifications and rent recovery for at least seven years.