📋 Key Facts at a Glance
- Progressive Rating System: Effective January 1, 2025 for high-value domestic properties only
- Non-Domestic Properties: Flat 5% rate on all commercial, industrial, and office properties
- Domestic Properties (RV ≤ HK$550,000): 5% flat rate (affects 98% of residential properties)
- Domestic Properties (RV > HK$550,000): Progressive rates: 5% on first HK$550,000, 8% on next HK$250,000, 12% on remainder
- Government Rent: 3% of rateable value for New Territories, north Kowloon, Outlying Islands, and post-1985 leases
- 2024-25 Rates Concession: Up to HK$500 for Q1 (April-June 2024) automatically applied
- Payment Schedule: Quarterly in advance (April, July, October, January)
- Valuation Reference Date: October 1, 2023 (effective April 1, 2024 for 2024-25 year)
Did you know that Hong Kong’s property rates system underwent a significant change in 2025, introducing progressive rates for high-value homes while keeping commercial properties at a flat rate? Whether you’re a homeowner, landlord, or tenant, understanding how property rates are calculated can save you money and prevent costly surprises. This comprehensive guide breaks down everything you need to know about Hong Kong’s property rates system for 2024-25.
Understanding Hong Kong’s Property Rates System
Property rates in Hong Kong are a form of property tax administered by the Rating and Valuation Department (RVD). These rates fund essential public services and infrastructure, and they’re levied on both residential and commercial properties. Unlike property tax (which is 15% on rental income), property rates are based on the estimated annual rental value of your property, regardless of whether it’s occupied or vacant.
What is Rateable Value?
Rateable value is the cornerstone of Hong Kong’s property rates system. It represents an estimate of the annual rental value of a property in the open market as at the designated valuation reference date, assuming the property is vacant and available to let.
The RVD assesses rateable values using the Rental Comparison Method, considering factors such as:
- Property size, age, and condition
- Location and accessibility
- Quality of finishes and facilities
- Transport connections and local amenities
- Comparable rental transactions in the vicinity
2024-25 Rates Structure: Progressive Rating System
Starting January 1, 2025, Hong Kong implemented a progressive rating system for higher-value domestic properties, while maintaining a flat rate for most properties and all commercial premises. This change affects only about 2% of residential properties (approximately 42,000 tenements).
| Property Type | Rateable Value Range | Rate Percentage |
|---|---|---|
| Non-Domestic (Commercial, Industrial, Office) |
All values | 5% |
| Domestic (Residential) |
≤ HK$550,000 | 5% |
| First HK$550,000 (for RV > HK$550,000) |
5% | |
| Next HK$250,000 (HK$550,001 – HK$800,000) |
8% | |
| Remainder (> HK$800,000) |
12% |
Calculation Formulas and Examples
Standard Rate Calculation (Non-Domestic & Domestic RV ≤ HK$550,000)
Annual Rates = Rateable Value × 5%
Quarterly Rates = (Rateable Value × 5%) ÷ 4
Progressive Rate Calculation (Domestic RV > HK$550,000)
Annual Rates =
- (HK$550,000 × 5%) +
- (Amount from HK$550,001 to HK$800,000 × 8%) +
- (Amount over HK$800,000 × 12%)
Quarterly Rates = Annual Rates ÷ 4
Government Rent Calculation
Annual Government Rent = Rateable Value × 3%
Quarterly Government Rent = (Rateable Value × 3%) ÷ 4
Step-by-Step Calculation Guide
- Step 1: Determine Your Rateable Value
Find your property’s rateable value through the quarterly “Demand for Rates and/or Government Rent” notice, RVD’s Property Information Online (www.rvdpi.gov.hk), or by visiting 15/F, Cheung Sha Wan Government Offices. - Step 2: Identify Your Property Type
Determine whether your property is domestic (residential: houses, flats, apartments) or non-domestic (commercial: shops, offices, factories, industrial units). - Step 3: Apply the Appropriate Rate
Non-domestic properties: Apply 5% rate
Domestic properties (RV ≤ HK$550,000): Apply 5% rate
Domestic properties (RV > HK$550,000): Apply progressive rates - Step 4: Calculate Government Rent (if applicable)
If your property is subject to government rent, calculate at 3% of rateable value. - Step 5: Divide by 4 for Quarterly Payment
Rates and government rent are paid quarterly in advance. - Step 6: Apply Any Concessions
For 2024-25, a rates concession of up to HK$500 applies to Q1 (April-June 2024).
Worked Examples
Example 1: Standard Residential Property
| Calculation Item | Amount |
|---|---|
| Rateable Value | HK$300,000 |
| Annual Rates (HK$300,000 × 5%) | HK$15,000 |
| Quarterly Rates (HK$15,000 ÷ 4) | HK$3,750 |
| Annual Government Rent (HK$300,000 × 3%) | HK$9,000 |
| Quarterly Government Rent (HK$9,000 ÷ 4) | HK$2,250 |
| Total Quarterly Payment | HK$6,000 |
| Q1 2024-25 (with HK$500 concession) | HK$5,500 |
Example 2: Mid-Range Property (Progressive Rates Apply)
| Calculation Item | Amount |
|---|---|
| Rateable Value | HK$700,000 |
| First HK$550,000 @ 5% | HK$27,500 |
| Next HK$150,000 @ 8% | HK$12,000 |
| Total Annual Rates | HK$39,500 |
| Quarterly Rates (HK$39,500 ÷ 4) | HK$9,875 |
| Annual Government Rent (HK$700,000 × 3%) | HK$21,000 |
| Quarterly Government Rent (HK$21,000 ÷ 4) | HK$5,250 |
| Total Quarterly Payment | HK$15,125 |
| Q1 2024-25 (with HK$500 concession) | HK$14,625 |
Payment Schedule and Deadlines
| Quarter | Period | Demand Notice Issued | Payment Due |
|---|---|---|---|
| Q1 | April – June | Mid-March | End of March / Early April |
| Q2 | July – September | Mid-June | End of June / Early July |
| Q3 | October – December | Mid-September | End of September / Early October |
| Q4 | January – March | Mid-December | End of December / Early January |
2024-25 Rates Concession
As announced in the 2024-25 Budget, the Hong Kong Government is providing rates relief to help ease the financial burden on property owners and tenants.
Concession Details:
- Period: First quarter of 2024-25 (April – June 2024)
- Amount: Up to HK$500 per rateable tenement
- Applicability: Both domestic and non-domestic properties
- Application: Automatic – no application required
- Coverage: Offsets rates payable only (does NOT apply to Government Rent)
| Q1 Rates Payable (Before Concession) | Concession Applied | Amount to Pay |
|---|---|---|
| HK$300 | HK$300 | HK$0 |
| HK$500 | HK$500 | HK$0 |
| HK$1,500 | HK$500 | HK$1,000 |
| HK$3,750 | HK$500 | HK$3,250 |
| HK$10,000 | HK$500 | HK$9,500 |
Who Pays: Landlord or Tenant?
The legal liability for paying property rates and government rent depends on the tenancy agreement:
General Rule: Owner/Landlord is legally responsible for payment to the RVD
Tenancy Agreements:
- Tenant pays rates: If specified in the lease, the tenant reimburses the landlord
- Landlord pays rates: Common in rental agreements where rent is “inclusive of rates”
- Mixed arrangements: Some leases split rates and government rent between parties
✅ Key Takeaways
- Progressive Rates Only Affect Luxury Homes: Only 2% of residential properties (RV > HK$550,000) pay progressive rates; 98% continue at the flat 5% rate
- Commercial Properties Unchanged: All non-domestic properties pay a flat 5% rate regardless of value
- Government Rent is Separate: Charged at 3% of rateable value, applies mainly to New Territories, north Kowloon, Outlying Islands, and post-1985 leases
- Quarterly Payment is Mandatory: Pay by the end of March, June, September, and December to avoid penalties
- 2024-25 Relief Available: Up to HK$500 rates concession for Q1 (April-June 2024) automatically applied to all properties
- Owner Responsibility: Legally, the property owner must pay rates to RVD, though tenancy agreements may require tenants to reimburse
- Right to Object: You can challenge your rateable value but must continue paying until resolved
- Use Official Tools: The RVD’s online calculator (www.rvd.gov.hk) provides accurate calculations for your specific property
Understanding Hong Kong’s property rates system is essential for effective financial planning, whether you’re a homeowner, landlord, or tenant. With the new progressive rating system affecting only high-value properties, most residents will continue to benefit from the straightforward 5% flat rate. Remember to check your rateable value annually, take advantage of available concessions, and always pay on time to avoid penalties. For complex situations or large property portfolios, consider consulting with a qualified tax professional who specializes in Hong Kong property taxation.
📚 Sources & References
This article has been fact-checked against official Hong Kong government sources and authoritative references:
- Inland Revenue Department (IRD) – Official tax rates, allowances, and regulations
- Rating and Valuation Department (RVD) – Property rates and valuations
- GovHK – Official Hong Kong Government portal
- Legislative Council – Tax legislation and amendments
- RVD Progressive Rating System – Official guide to progressive property rates
- RVD Rates Concession – Official information on rates concessions
- GovHK Property Tax Guide – Official property tax computation guide
Last verified: December 2024 | Information is for general guidance only. Consult a qualified tax professional for specific advice.
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