Tax
Hong Kong Property Tax Guide 2026:
Essential Tax-Saving Tips Every Landlord Should Know
Gary Chung（FinKit Editor-in-Chief） · Published：June 6, 2026
Do you have to pay property tax on rental income? Not necessarily! Using Personal Assessment could save you a significant sum. This guide covers how property tax is calculated, when it applies, and how to legally reduce your bill.
What Is Property Tax?
Property tax is the tax payable by landlords on rental income from letting out property. The tax rate is 15% of the net assessable value, which is rental income less rates and a 20% statutory allowance for repairs and outgoings.
Note: owner-occupied properties are not subject to property tax. Property tax only applies to properties used for rental purposes.
Property Tax Formula
Worked Example
Suppose you let out a flat:
- Monthly rent: HK$15,000
- Annual rental income: HK$180,000
- Quarterly rates: HK$2,500 → HK$10,000 per year
* The 20% repairs and outgoings allowance is a standard deduction applied regardless of actual expenses incurred.
🔑 The Key Tax-Saving Move: Personal Assessment
If you have a mortgage (high interest outgoings) or unused personal allowances, electing for Personal Assessment could save you substantially more tax!
Personal Assessment consolidates your property tax + salaries tax + profits tax into a single computation using progressive tax rates (2%–17%) rather than the flat 15%. Crucially: you can deduct mortgage interest — something pure property tax does not allow.
When is Personal Assessment more advantageous?
- The property has a mortgage with high annual interest payments
- Your salaries tax rate is low (e.g. the progressive rate works out below 15%)
- You have various unused personal allowances
Deductible Expenses for Rental Properties (Under Personal Assessment)
| Deduction Item | Explanation |
|---|---|
| Mortgage interest | Mortgage interest on the rented property is fully deductible (under Personal Assessment) |
| Rates | Rates already paid are deductible |
| Government rent | Some properties are subject to government rent — this is deductible |
| Property management fees | Actual management fees paid are deductible |
| Repairs and maintenance | Actual repair expenses can be deducted (instead of the 20% standard allowance) |
| Agent commission | Commission paid to an estate agent for letting the property is deductible |
Frequently Asked Questions
Do I pay property tax on my own home?
No. Property tax only applies to rental income from let properties. Owner-occupied homes are only subject to rates and government rent (if applicable).
Do I need to declare rent if I'm letting to a relative or friend?
Legally, any rent received must be declared, regardless of who the tenant is. In practice, if the rent is nominal and there is no formal tenancy agreement, the IRD may not investigate. Proceed at your own risk.
I own two flats — one I live in, one I rent out. How do I file?
The owner-occupied flat does not require a property tax return. The rented flat is assessed independently on its rental income. You may elect to bring the rented property under Personal Assessment.
20% standard allowance vs actual expenses — which is better?
If you've had minimal repair costs that year (e.g. a new build), the 20% standard allowance is usually more favourable. But if you carried out major repairs (replacing air-conditioners, renovation), claiming actual expenses may yield a larger deduction. Note: claiming actual expenses is only available under Personal Assessment.
What happens if I forget to declare rental income on my tax return?
Failure to declare rental income may be treated as tax evasion, potentially resulting in fines or even prosecution. The IRD has the power to recover up to 6 years of underpaid tax. If you realise a mistake after receiving your tax bill, notify the IRD in writing as soon as possible to correct it.
Key Property Tax Dates for 2026
Want to calculate your property tax? Try our calculator:
Property Tax Calculator →