e-Seminar for Property Owners

Points to note

1. The Charge to Property Tax
   

   Property Tax is charged on property owner(s) and is computed at the standard rate on the net assessable value (NAV).

   If any part of the common areas of a building is let out, the rental income derived is chargeable to Property Tax. Click HERE for further explanation.
   Owners do not need to pay Property Tax if their properties are

   • occupied as dwelling without receipt of rent.
   • used as business premises without receipt of rent, or
   • vacant
2. Notification of Chargeability to tax
   
   If you are liable to pay tax for any year of assessment, the Inland Revenue Ordinance (IRO) requires you to furnish a written notification of chargeability to the Commissioner by the 31 July of the year following that year of assessment, unless you have already received a tax return from the Inland Revenue Department (IRD).
   
   Failure to do so may cause you heavy penalties.
   For further information, please refer to Notification of Chargeability.
   
   Soon after you have purchased a new property or changed the usage of any of your properties, you should consider the tax implication – that is, whether you have to notify the IRD of chargeability to tax.
3. Filing of Tax Returns
   
   For properties 100% owned by the owner who is an individual person
   
   That individual owner is the subject of reporting. He / she should report the rental information of all of his / her wholly owned properties that were let during the year in the “Tax Return – Individuals” (BIR60).
   
   For properties owned by two individual persons or more
   
   The property unit is the subject of reporting. IRD creates and maintains individual property tax files for each property jointly-owned or co-owned by individual persons.
   
   The rental information should be reported by any owner in a “Property Tax Return – Property Jointly Owned or Co-owned by Individuals” (BIR57).
   
   For properties owned by either a corporation or a body of persons (such as a “Tso”, “Club”)
   
   Rental information from the property should be reported by any owner in a “Property Tax Return – Corporations and Bodies of Persons” (BIR58).
   
   You must file tax return in time
   
   If you are a property owner and you have received a tax return from the IRD, you must complete and lodge it within 1 month*, even if
   • you do not let your property (in this event you should declare no letting in the return),
   • you do not receive any rental income, or
   • you are exempt from tax (because for the year of assessment concerned you are eligible to elect for Personal Assessment, and under Personal Assessment, your total tax allowances and deductions are greater than your total assessable income).
   
   * For returns submitted through the Internet, an extension of 2 weeks will be given.
4. Tax Liabilities of Corporations
   
   The basic rule is that a corporation letting property in Hong Kong is carrying on business in Hong Kong and subject to Profits Tax in respect of its property income.
   
   Besides, a corporate property owner is also chargeable to Property Tax on rental income from the letting of property according to the IRO.
   
   However, the same income will not be taxed twice. Normally rental income will be assessed as part of the profits subject to Profits Tax.
   
   Should you require further explanation, please click HERE.
5. Tax Liabilities of Executor. Please click HERE.
   
   
6. Join the "e-Seminar for Property Owners" 
   
   If you wish to know more about the tax obligations of property owners, how their rental income should be reported and assessed to tax, how you may claim deductions for your interest payments, or you want to find out whether you may pay less tax through electing for Personal Assessment, we welcome you to the "e-Seminar for Property Owners". click HERE.
7. Common Questions and Answers on Completion of Property Tax Returns
   
   We have uploaded some common questions under "Common Questions and Answers on Completion of Property Tax Returns ". Other questions are welcome. If you have any enquiries, you can send us an e-mail at taxinfo@ird.gov.hk. To minimize duplications and for cost-effectiveness, we shall periodically upload answers to the net on a collective basis. Re-visit the “Common Questions and Answers on Completion of Property Tax Returns” from time to time for our update.
8. Provide general guidance
   
   The "e-Seminar for Property Owners" is intended to give general guidance only. For any specific technical issues, you should seek assistance from professional accountants / legal advisors.