How does property tax work for rental income in Hong Kong?
Property tax is charged on the owner of land or buildings in Hong Kong at the standard rate of 15% on net assessable value. Net assessable value is the rent received less rates paid by the owner and a 20% statutory allowance for repairs and outgoings. Companies that rent property are usually under profits tax instead.
Property tax applies to owners of Hong Kong land or buildings who receive rent.
Calculation (per the IRD guide)
- Start with the assessable value: rent received or receivable, plus premiums, service charges paid to the owner, and owner's expenses borne by the tenant. Irrecoverable rent can be deducted.
- Deduct rates paid by the owner (not government rent or management fees).
- Deduct a 20% statutory allowance for repairs and outgoings.
- Apply the standard rate of 15% (2019/20 onwards).
Individuals. An individual landlord can elect personal assessment so that property income is combined with other income and allowances apply. The one-off 2025/26 tax reduction does not apply to property tax directly, but may apply through personal assessment.
Companies. A corporation that lets property in Hong Kong is regarded as carrying on business, so it is chargeable to profits tax on the rent. Property tax paid is set off against the profits tax, and on written application the corporation may be exempt from paying property tax.
Joint owners receiving rent file property tax returns. Tenancy agreements must be stamped (see the stamp duty answer).
Legal basis
- Inland Revenue Ordinance (Cap. 112), s.5
Sources
Applies to YA 2025/26 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- Does Hong Kong have VAT, GST or sales tax?No. Hong Kong has no value-added tax, goods and services tax or sales tax. The only taxes on income are profits tax, salaries tax and property tax, plus duties such as stamp duty. The government also confirms there is no capital gains tax and no withholding tax on dividends or interest.
- What is the profits tax rate for a Hong Kong company?Under the two-tiered system, a corporation pays 8.25% on its first HK$2 million of assessable profits and 16.5% on the rest. The lower rate is available to only one entity in a group of connected entities. This applies from year of assessment 2018/19 onwards.
- What profits tax rate do sole proprietors and partnerships pay in Hong Kong?Unincorporated businesses pay 7.5% on the first HK$2 million of assessable profits and 15% on the remainder, from year of assessment 2018/19. This is the two-tiered system. As with companies, only one entity in a group of connected entities can use the lower rate.
- What are the salaries tax rates in Hong Kong?For 2025/26 the progressive scale is 2%, 6%, 10%, 14% on successive HK$50,000 bands, then 17% on the rest. Tax cannot exceed the standard rate on net income before allowances: 15% on the first HK$5 million and 16% above. The lower of the two results applies.
- What are the personal allowances for Hong Kong salaries tax?For 2025/26 the basic allowance is HK$132,000, married person's HK$264,000 and each child HK$130,000. From 2026/27 these rise to HK$145,000, HK$290,000 and HK$140,000 respectively, under the 2026-27 Budget law gazetted on 22 May 2026. The IRD applies new amounts to provisional tax automatically.