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LCQ19: Property tax


Following is a question by the Hon Sin Chung-kai and a written reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council today (March 14):


Under the Inland Revenue Ordinance (Cap. 112), the owner of any land or buildings or land and buildings shall pay property tax to be computed at the standard rate on the net assessable value (80% of the rental income after deducting the rates paid by the owner) of the relevant land or/and buildings. In this connection, will the Government inform this Council:


(a) (i) of a breakdown, by groupings in terms of whole-year rental income of the tenements concerned, of the total amount of property tax charged by the Government each year; and
  (ii) of the annual number of tenements which are subject to property tax, together with a breakdown by the type of buildings, since the tax year 1997-1998; and
(b)   given that the number of "sole tenants" (i.e. households which rent the whole tenements) living in private buildings has been around 170 000 to 220 000 since 2000, as revealed in the Quarterly Reports on General Household Survey published by the Census and Statistics Department, why the number of property tax demand notes issued for each of the relevant tax years by the Inland Revenue Department were around 80 000 to 90 000 only?


Madam President,

(a) Under the Inland Revenue Ordinance, property owners who receive rental income are assessable to property tax at the standard rate. Individual property owners may, however, elect to have their rental income assessed with other incomes under personal assessment.
  (i) In the years of assessment from 1997-98 to 2005-06, the total amount of property tax charged by the Government each year is shown at Table 1 at annex.
  (ii) The number of rental tenements liable to property tax or tax under personal assessment each year in the years of assessment from 1997-98 to 2005-06 is as follows:

Table 2

Year of assessment
  Number of rental tenements
liable to tax
-----------------------------   ----------------------------------------
2005-06 (Note)   222,600
2004-05   213,286
2003-04   211,857
2002-03   208,103
2001-02   213,434
2000-01   213,543
1999-2000   208,638
1998-99   204,688
1997-98   203,944

Note: Not all property tax demand notes for the 2005-06 year of assessment have been issued.

As property owners are not required to report the types of rental tenements in their tax returns, the Inland Revenue Department (IRD) does not have any information on property tax assessment by types of tenements.


(b) As mentioned in (a) above, not all rental property owners elect to be charged under property tax. Therefore, the number of property tax demand notes issued by IRD each year does not necessarily reflect the total number of rental tenements chargeable to property tax in that year of assessment (i.e. the numbers listed in Table 2 above).

Ends/Wednesday, March 14, 2007
Issued at HKT 11:30