Posted by
annej
16 yrs ago
Hi All,
I am no longer a HK resident, but own a small flat which is rented out. The rent I charge only just covers the mortgage payment, management fees and govt rates (I have about HK$1000 over each month which, of course, goes towards any maintenance costs).
I have just received my tax bill for the rent received and realise that they tax the whole amount of rental income minus about 20% standard maintenance costs. Is this right if I am barely breaking even?? This is my only form of income in HK (as I have now left the country), so shouldn't my personal allowances be used against any income earned??
I am pretty confused by this as I have another property in the UK, where I complete a tax return each year and I can use mortgage payments, maintenance, and my personal allowance to offset the bill. I have been doing this for 4 years in the UK and have never had to pay any tax.
Any advice would be greatly appreciated.......!
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MJ1
16 yrs ago
Unfortunately, the current assessment by the IRD is correct.
You cannot use personal allowance to offset the rental income. Nor can you use the interest payments on the mortgage.
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annej
16 yrs ago
Ok. Thanks guys.
Guess I'll have to pay the dreaded tax then - at least I have until Nov. It just seems so out-pf-kilter with the rest of HK's tax laws which I think, in general, are very fair.
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MJ1
16 yrs ago
My understanding is that since Annej no longer resides in HK, Annej will not qualify for personal assessment. But like Loyd said, you should contact IRD to double check this.
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annej
16 yrs ago
MJ1 is correct. I called the IRD yesterday and as I am no longer resident there is nothing I can do to reduce the tax. But for all you HK residents on lower incomes then personal assessment is definitely the way to go, as suggested by LGMV.
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