Understanding Hong Kong Property Tax for Landlords

Property tax in Hong Kong is a direct tax levied on owners of land and/or buildings who receive rental income from properties located within the Special Administrative Region. Whether you’re a local or overseas landlord, individual or corporate property owner, understanding the filing process is essential for compliance and optimizing your tax obligations.

The Inland Revenue Department (IRD) administers property tax under the Inland Revenue Ordinance. The tax is calculated at a standard rate of 15% on the net assessable value of your rental income, after deducting a statutory 20% allowance for repairs and maintenance.

Who Needs to File Property Tax Returns?

You must file a property tax return if you:

• Own property in Hong Kong that generates rental income
• Are a joint owner or owner in common of rental property
• Receive rent, lease premiums, or non-refundable deposits from tenants
• Act as an agent for overseas property owners

Sole Ownership vs. Joint Ownership

Solely Owned Properties: Report rental income in your Tax Return – Individuals (Form BIR60).

Jointly Owned or Co-Owned Properties: Each property requires a separate Property Tax Return (Form BIR57). This applies when you own property with one to three other person(s), including individuals, corporations, or other entities.

Property Tax Forms and Filing Methods

Form BIR57: Property Tax Return

Form BIR57 is the official Property Tax Return for jointly-owned or co-owned properties. The IRD typically issues these forms on the first working day of April each year, with accompanying “Notes and Instructions” to guide you through completion.

Reporting Period:

• Normal Year: 1 April to 31 March (e.g., 2024/25 covers 1 April 2024 to 31 March 2025)
• Year of Acquisition: Date of purchase to 31 March
• Year of Disposal: 1 April to date of cessation of ownership

Filing Options: Paper vs. eTAX Online

Paper Filing:

• Deadline: 1 month from the date of issue
• Mail completed BIR57 to the IRD
• Attach all supporting documents

eTAX Electronic Filing (Recommended):

• Deadline: 2 months from the date of issue (automatic extension)
• Accessible 24/7 via desktop, tablet, or mobile device
• Mobile-responsive platform with iAM Smart/iAM Smart+ login support (2025 update)
• Secure digital submission with confirmation receipts
• e-Alert messages before filing and payment deadlines
• Track filing status and view assessment notices electronically

Step-by-Step Filing Guide

Step 1: Register for eTAX (First-Time Users)

If you haven’t used eTAX before:

1. Visit the official eTAX website (www.gov.hk/etax)
2. Click “Apply for eTAX password”
3. Provide your Hong Kong Identity Card (HKID) or equivalent identification
4. Enter your Taxpayer Identification Number (TIN)
5. Wait for activation code (sent within 2 working days)
6. Complete registration with the activation code

Alternative: Login using iAM Smart or iAM Smart+ digital credentials for immediate access.

Step 2: Access Your Property Tax Return

1. Login to eTAX Individual Tax Portal (ITP)
2. Select “View Services”
3. Choose the appropriate tax return form:
   • BIR57 for jointly-owned properties
   • BIR60 for solely-owned properties
4. Select the relevant year of assessment (e.g., 2024/25)

Step 3: Complete the Property Tax Return

Part 1: Property Information

• Full address of the rental property
• Nature of property (residential, commercial, industrial)
• Ownership details and percentages (for joint ownership)

Part 2: Rental Status

• Indicate if the property was let during the year (tick “Yes” or “No”)
• If not let, no further details required

Part 3: Rental Income Details (Parts 4.1 to 4.4)

• Assessable Value: Total rent received or receivable during the year
• Include: Monthly rent, lease premiums, key money, non-refundable deposits, irrecoverable rent recovered
• Tenancy Period: Start and end dates of each tenancy
• Tenant Information: Name and contact details

Part 4: Deductions

• Rates Paid by Owner: Only government rates actually paid by you (not paid by tenant)
• Irrecoverable Rent: Rent proven to be uncollectable
• 20% Standard Deduction: Automatically applied by IRD (no action needed)

Important: Government rent, management fees, insurance, renovation expenses, and refurbishment costs are NOT deductible under property tax. However, if eligible, you may claim these under Personal Assessment.

Step 4: Review and Submit

1. Review all entered information for accuracy
2. Ensure all rental periods and amounts are correct
3. Verify deductions claimed are allowable
4. Submit electronically through eTAX
5. Save confirmation receipt and reference number

Step 5: Receive Assessment and Make Payment

After submitting your return, the IRD will issue a Notice of Assessment showing:

• Net assessable value (rental income minus rates and 20% allowance)
• Property tax payable (15% of net assessable value)
• Payment due dates

Provisional Tax Payment Schedule:

• First Instalment: Typically due in November
• Second Instalment: Typically due in April of the following year

Payment Methods via eTAX:

• Online banking (PPS, internet banking)
• Credit card payments
• Bank ATM transfers
• Direct debit authorization

Required Documents Checklist

Special Filing Situations

Filing for Overseas Property Owners

If you’re residing outside Hong Kong or an authorized agent acting on behalf of overseas owners:

• Obtain written authorization from the property owner(s)
• Attach a copy of the Power of Attorney or Letter of Authorization to the return
• Include agent details: name, HKID/business registration number, postal address
• Specify dates of commencement and cessation of agency (if known)

When Owners Cannot Sign

If the property owner cannot write or sign:

• A name-chop, thumbprint, or mark (such as “X”) is acceptable as a signature
• Must be witnessed by a person aged 18 or above
• Witness must sign, date, and provide full name and HKID number

Notification of New Letting

If you previously reported “no rental income” but subsequently let your property:

• Notify the IRD immediately in writing
• Provide tenancy particulars in a letter, or
• Complete Form IR6129 – “Notification of Letting of Properties”

Holdover Applications

If you qualify for a holdover (deferment of payment):

• Apply in writing no later than 28 days before the payment due date, or
• Within 14 days after the notice for provisional property tax, whichever is later
• Provide supporting justification for the holdover request

Understanding Property Tax Calculations

How Property Tax is Computed

Example Calculation

What Can and Cannot Be Deducted

Personal Assessment Alternative

If you have other income sources or significant deductible expenses, you may elect for Personal Assessment instead of standard property tax. This allows you to:

• Claim mortgage interest deductions (subject to limits)
• Offset rental losses against other income
• Claim personal allowances and deductions
• Potentially benefit from progressive tax rates (2% – 17%) instead of the flat 15%

Note: The 2025-26 budget tax reduction (relief) is not applicable to property tax. However, individuals may enjoy tax reduction if eligible for Personal Assessment. Consult a tax professional to determine the most beneficial approach.

Deadlines and Penalties

Key Deadlines

Penalties for Non-Compliance

Failure to file on time or accurately report rental income can result in:

• Late Filing Surcharges: 5% to 15% of tax due
• Maximum Penalty: Up to HKD 10,000 plus additional tax
• Estimated Assessments: IRD may issue assessments without allowable deductions
• Prosecution: In serious cases, penalties can reach three times the underpaid tax
• Interest Charges: Additional charges on late payments

Important: Always file on time, even if you cannot pay immediately. Contact the IRD to arrange payment plans if needed.

2025 Updates and Recent Changes

eTAX Platform Enhancements (2024-2025)

The IRD has modernized the eTAX platform with several improvements:

• Mobile-Responsive Design: Optimized interface for desktops, tablets, and smartphones
• iAM Smart Integration: Login using iAM Smart or iAM Smart+ digital credentials
• Enhanced Security: Improved authentication and data protection measures
• User-Friendly Interface: Streamlined navigation and clearer instructions
• e-Alert Notifications: Automatic reminders for filing and payment deadlines

2025-26 Budget Measures

Relevant property-related measures from the 2025-26 budget:

• Rates Waiver: First quarter of 2025-26, capped at HKD 500 per domestic property
• Progressive Rating System: Effective January 1, 2025 for domestic properties
• Stamp Duty Adjustment: Maximum property value for HKD 100 stamp duty raised to HKD 4 million (effective February 26, 2025)

Frequently Asked Questions

Additional Resources

• IRD eTAX Portal: www.gov.hk/etax
• IRD Property Tax Information: www.ird.gov.hk/eng/tax/ind_ppt.htm
• Property Tax FAQ: www.ird.gov.hk/eng/faq/pty.htm
• Form IR6129 (Notification of Letting): Available on IRD website
• IRD Enquiry Hotline: 187 8022
• iAM Smart Registration: www.iamsmart.gov.hk