Hong Kong Airbnb & Short-Term Rental Tax — Host Tax Guide

Yes. All Hong Kong-source rental income is subject to property tax or profits tax under the Inland Revenue Ordinance. There is no minimum threshold below which rental income is tax-free. Additionally, platforms now share host income data with tax authorities internationally under OECD DAC7 rules.

If you merely make the property available for rent without providing substantial services, IRD will generally treat the income as property income subject to property tax at 15%. If you provide hotel-like services (daily cleaning, meals, concierge, linen change), IRD may treat the activity as a business subject to profits tax. The boundary is not always clear — professional advice is recommended.

Under property tax, the only deduction is the statutory 20% of gross rent (in lieu of actual expenses) plus rates paid by the owner. Under profits tax, you can deduct actual expenses including platform commission, cleaning fees, insurance, repairs, furnishing depreciation, utilities, and mortgage interest if the property is used wholly for business. The deductible amount is often much higher under profits tax.

IRD can assess back 6 years (or longer if fraud or wilful evasion is involved). Penalties can be up to 3 times the tax undercharged. A voluntary disclosure — made before IRD contacts you — typically results in significantly reduced penalties, often limited to the tax plus interest. We handle these disclosures regularly.

Short-term residential rentals under 28 consecutive days may technically breach the Building Management Ordinance Cap.344 or deed of mutual covenant restrictions in many buildings. Hotels Ordinance Cap.349 licensing requirements may also apply. These are separate from (but related to) tax compliance. We advise on the tax side and recommend consulting a solicitor on the regulatory aspects.

If IRD determines your STR activity constitutes a trade or business (rather than passive rental), you will need a Business Registration Certificate under the Business Registration Ordinance Cap.310. The annual fee is modest (around HKD 2,000) but failure to register carries penalties.