Property tax

Posted by Saikunga (311 days ago)

When we bought our house there were still tenants in it - they were paying $21,000 a month. They had 2 months left on the lease, and then they left and we moved in. We had a huge mortgage and interest payments came to over $60,000 for those two months plus $1700 a month management fees, so we actually didn't make any money in those two months - it cost us money.

Just got a property tax bill for over $4887, I wrote them a letter explaining all of this, included documentation as I don't think we should be paying so much in tax. They have written back saying that interest is not a deductible item under property tax and that it is payable because we did not elect Personal Assesment - Individual.

They have come up with a figure of $30,547 as the Net assesable value which makes the property tax 15% - is this right?

We elected to have a joint assesment if it worked out better for us.

Can anyone enlighten me on what else I can do to reduce this tax bill? In Australia, interest is an allowable tax deduction for an investment property, so this has come as a bit of a shock.

Also, how can people make any money out of rental property here if the interest is not tax deductible?

Posted by spaceren (308 days ago)

As indicated by IRD elect personal assessment....problem solved.

Go to www.ird.gov.hk and look for form to amend to elect personal assessment.

Posted by Saikunga (308 days ago)

Will this mean we end up paying the 'extra' tax in a different form?

With the joint assesment the IRD supposedly looks at your returns and decides if it is better for you to be assesed jointly or individually (well that is what the blurb tells us). I am just a bit confused!