Property tax in Hong Kong is not a single charge. Owners and landlords deal with four separate items: Property Tax on rental income (a flat 15% on net assessable value), annual Rates at 5% of rateable value, annual Government Rent at 3% of rateable value, and Stamp Duty when buying, selling, or leasing. Each is administered under its own rules, and knowing which lever you can pull is where the savings sit.
Property Tax on Rental Income
If you rent out land or buildings in Hong Kong, the Inland Revenue Department (IRD) charges Property Tax at the standard rate of 15% on the net assessable value.1GovHK. Tax Rates of Property Tax
Getting to that net assessable value takes a few steps. Start with total rental income for the year, which includes rent, premiums, and any service charges paid to you as owner. Subtract any rent you couldn’t collect. If you pay the Rates yourself instead of passing them to the tenant, subtract those as well. What’s left is the assessable value.
From there, the IRD automatically applies a flat 20% deduction for repairs and outgoings.2GovHK. Statutory Allowance for Repairs and Outgoings – Property Tax This allowance is all-inclusive. You cannot add actual repair costs, management fees, insurance, or mortgage interest on top. Multiply the figure that remains by 15% and you have the Property Tax due.
A quick worked example: a property earning HK$480,000 in annual rent, with HK$24,000 in Rates paid by the owner and no bad debts, produces a net assessable value of HK$364,800. Property Tax due: HK$54,720.
How to Reduce Your Property Tax Bill
Elect for Personal Assessment
If you have other Hong Kong income, such as a salary, you can elect Personal Assessment on your annual tax return (Form BIR60). This pools your income and applies progressive rates and personal allowances instead of the flat 15%.
The advantage that matters most for landlords: Personal Assessment lets you deduct mortgage interest against your rental income, which is otherwise blocked under standard Property Tax rules.2GovHK. Statutory Allowance for Repairs and Outgoings – Property Tax Add personal allowances, and the election can meaningfully cut your total liability if your overall income is modest.
There’s a trap. Hong Kong’s top marginal rate is 17%, higher than the 15% standard rate. If enough of your aggregated income falls in the top band, Personal Assessment could raise your bill instead of lowering it. Work the figures both ways before you elect. The IRD will not do the comparison for you.
Profits Tax Set-Off for Business Owners
If you carry on a business and the rental income is already brought into your Profits Tax computation, the IRD may still raise Property Tax on the same income. Section 25 of the Inland Revenue Ordinance prevents true double taxation by allowing the Property Tax paid to be set off against your Profits Tax liability. The Property Tax assessment still issues, but the credit ensures the same rental dollars are not taxed twice.
Rates and Government Rent
Rates are an annual charge on the occupation of property, calculated at 5% of the rateable value. Rateable value is the Rating and Valuation Department’s (RVD) estimate of what the property would fetch as annual rent on the open market, reassessed every year. Any property with a rateable value above HK$3,000 is liable, occupied or not. Both owner and occupier are technically liable, but in practice the owner pays.
Concessions come and go with the annual budget. For 2025–26, a one-off concession applies only to the first quarter (April to June 2025), capped at HK$500 per rateable tenement, with nothing for the remaining three quarters.3Rating and Valuation Department. Rates Concession for the Financial Year 2025-26 Check each April for the current year’s terms.
Government Rent is a separate annual charge tied to your land lease, since virtually all land in Hong Kong is held under government leases rather than freehold. Where the Government Rent (Assessment and Collection) Ordinance applies, the rate is 3% of the rateable value and moves automatically whenever the RVD revises that value.4Rating and Valuation Department. Rating and Valuation Department – Government Rent The ordinance covers most New Territories properties and many others across Hong Kong.5GovHK. Government Rent Properties on Hong Kong Island or in Kowloon held under older leases granted before 27 May 1985 may instead pay government rent directly to the Lands Department under different arrangements. Unlike Rates, Government Rent is due whether the property is occupied or empty.
Stamp Duty When You Buy
The rules on buying a home changed sharply on 28 February 2024, when the government abolished all “demand-side management measures” that had built up during the property-cooling years.6Inland Revenue Department. Abolition of Demand-Side Management Measures for Residential Properties Special Stamp Duty on quick resales, the Buyer’s Stamp Duty on non-permanent residents and companies, and the New Residential Stamp Duty are all gone.
What remains is a single progressive Ad Valorem Stamp Duty (AVD) schedule, the Scale 2 rates, applied uniformly regardless of residency, existing property holdings, or whether the property is residential or commercial.7Inland Revenue Department. Illustrative Examples of the Application and Computation of AVD – Scale 1 and Scale 2 Duty is based on the sale price or market value, whichever is higher:
- Up to HK$3,000,000: HK$100
- HK$3,000,001 to HK$3,528,240: HK$100 plus 10% of the amount over HK$3,000,000
- HK$3,528,241 to HK$4,500,000: 1.5%
- HK$4,500,001 to HK$4,935,480: HK$67,500 plus 10% of the amount over HK$4,500,000
- HK$4,935,481 to HK$6,000,000: 2.25%
- HK$6,000,001 to HK$6,642,860: HK$135,000 plus 10% of the amount over HK$6,000,000
- HK$6,642,861 to HK$9,000,000: 3%
- HK$9,000,001 to HK$10,080,000: HK$270,000 plus 10% of the amount over HK$9,000,000
- HK$10,080,001 to HK$20,000,000: 3.75%
- HK$20,000,001 to HK$21,739,120: HK$750,000 plus 10% of the amount over HK$20,000,000
- Over HK$21,739,120: 4.25%
The transitional bands smooth the jumps between rates.8Inland Revenue Department. Rates of Stamp Duty – Sale or Transfer of Immovable Property A property bought at HK$8,000,000, for instance, sits in the 3% band and attracts HK$240,000 in duty.
Stamp Duty on Tenancy Agreements
The lease itself is a stampable document, and both parties are jointly liable. A lease of one year or less attracts duty at 0.25% of the total rent payable over the term. Between one and three years, it’s 0.5% of the average annual rent. Over three years, 1% of the average annual rent. Splitting the cost between landlord and tenant is common practice.
Skipping the stamping has a real cost. An unstamped tenancy agreement cannot be produced as evidence in court, so if a dispute reaches the Lands Tribunal, you cannot enforce the lease you signed.
Payment Deadlines and Late Penalties
Rates and Government Rent are billed together, quarterly, in advance. The RVD’s demand note is due on the last day of the first month of each quarter: 31 January, 30 April, 31 July, and 31 October. Miss it and a 5% surcharge lands. If the total (including that surcharge) is still unpaid six months on, another 10% surcharge is added.9GovHK. Rates and Government Rent Due April 30
Property Tax runs on the year of assessment from 1 April to 31 March.10Inland Revenue Department. An Introduction to Reporting for Tax by Individual Taxpayers After year-end the IRD issues a final assessment, and during the year it also raises provisional Property Tax based on the previous year’s figures, payable in two installments.
Holdover of Provisional Property Tax
If rental income has fallen, you can apply to hold over part of the provisional charge. The main ground is that your assessable value for the current year is, or is likely to be, less than 90% of the figure used to work out the provisional tax. You’ll need rental figures to back the claim. Other grounds include selling the property before year-end, electing Personal Assessment in a way that reduces liability, or having an unresolved objection to the previous year’s assessment.11GovHK. Holding Over of Provisional Tax
Disputing an Assessment
If you disagree with the RVD’s rateable value, you can lodge a formal objection on the prescribed form. The RVD conducts an administrative review, and unresolved disputes can escalate to the Lands Tribunal.
For Property Tax, the objection must go in writing to the Commissioner of Inland Revenue within one month of the Notice of Assessment date, with your grounds clearly stated.12Inland Revenue Department. Objections and Holdovers Late objections are generally rejected, although the Commissioner has discretion to accept them where you were prevented from filing on time by absence from Hong Kong, illness, or another reasonable excuse.
One point catches people out. Filing an objection does not suspend your obligation to pay. Unless the Commissioner specifically orders a holdover pending the outcome, the full amount is still due by the deadline. A successful objection produces a refund with interest, but you need to be able to fund the assessment in the meantime.