Hong Kong Carpark & Storage Tax — Parking Bay & Self-Storage Guide

It depends on how you operate the carpark. If you simply let individual parking bays under monthly licence agreements with no active services, the income is property income subject to property tax at 15% (less the 20% statutory deduction). If you operate a managed carpark with attendants, hourly billing, or valet services, IRD may treat the income as business income subject to profits tax at 16.5% — though this opens up wider deduction claims.

Carparks are commercial property and are not subject to Buyer's Stamp Duty (BSD) for HKPR individuals — unlike residential property where BSD applies to company buyers. HKPR individuals buying carparks pay only AVD at commercial rates (up to 4.25%), with no SSD on resale regardless of holding period. Companies buying carparks still pay BSD at 15%. This makes carparks significantly more attractive for HKPR investors compared to residential property.

Yes. EV charging equipment qualifies as plant and machinery under s.39B IRO. Initial allowance of 60% applies in the year of installation, with annual allowances of 10–30% thereafter. The government has also offered enhanced deductions for green investments in various budgets. For a HKD 500,000 EV charging installation, the year-1 deduction could be HKD 300,000.

For a portfolio of this size, the holding structure becomes important. Personal ownership is simpler and property tax at 12% effective rate may be lower than profits tax. Company ownership provides limited liability, easier succession (share transfer rather than property transfer), and potentially deductible management expenses. The stamp duty on any restructuring must also be modelled. We typically recommend a comparative model covering 10-year total tax cost.

The analysis is similar: passive self-storage (just providing a locked unit) is more likely to be treated as property income. Managed self-storage with staff, security monitoring, climate control, and active inventory management services is more likely to be treated as a business. Profits tax treatment allows deduction of staff costs, equipment, security systems — not available under property tax. Determining the correct classification is important before filing.

Carparks (classified as commercial property) are not subject to Special Stamp Duty (SSD) on resale, regardless of holding period. They are also not subject to Buyer's Stamp Duty for HKPR individuals. This means carparks do not carry the same transaction cost burden as residential property, making them more liquid investments. However, the full government cooling measure position should be verified at the time of transaction as policies change.