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Deduction for the home loan interest additional deduction for the year of assessment 2024/25 - Illustrative Examples
| Example 1 | Example 2 | Example 3 | Example 4 | Example 5* | |
| Property Owner | Self | Self | Self and Spouse | Spouse | Self |
| Ownership | 100% | 40% | Self 50% Spouse 50% |
100% | 100% |
| Self elects to claim additional deduction | Yes | Yes | Yes | No | Yes |
| Spouse elects to claim additional deduction | N/A | N/A | No | Yes | N/A |
| Total home loan interest paid during the year | $150,000 | $120,000 | $150,000 | $200,000 | $150,000 |
| Total domestic rent paid during the year | - | - | - | - | $60,000 |
* Example 5 is a case where the taxpayer claims deduction of domestic rent for the early part of the relevant year of assessment and then turns to claim home loan interest in the latter part of the year.
Mr. Chan is a sole owner of a dwelling in Hong Kong, which is exclusively used as his principal place of residence. He paid home loan interest (“HLI”) of $150,000 for the year from 1 April 2024 to 31 March 2025. His child was born on 30 June 2024. He resided with that child in Hong Kong for a continuous period of not less than 6 months during the year of assessment 2024/25. He would like to claim the deduction of HLI and also made an election in writing to claim deduction of HLI additional deduction.
(a) Mr. Chan has been allowed deduction of HLI for 10 years up to and including the year of 2023/24.
Deduction allowable for the year of assessment 2024/25
| Mr. Chan | |
| Deduction of HLI | Allowable amount |
| HLI basic deduction | $100,000 [A] (capped by the HLI basic deduction ceiling amount) |
| HLI additional deduction | $20,000 [B] (capped by the HLI additional deduction ceiling amount) |
| HLI increased deduction | $120,000 [A]+[B] |
| Regarded as having been allowed HLI additional deduction in the year of assessment | Yes |
(b) Mr. Chan has been allowed deduction of HLI for 20 years up to and including the year of assessment 2023/24.
Deduction allowable for the year of assessment 2024/25
Since Mr. Chan has already been allowed deduction of HLI for 20 years up to and including the year of assessment 2023/24, he will no longer be allowed the deduction of HLI basic deduction. It follows that he is not eligible for the deduction of HLI additional deduction either.
| Mr. Chan | |
| Deduction of HLI | Allowable amount |
| HLI basic deduction | $0 |
| HLI additional deduction | $0 |
| Total allowable deduction of HLI | $0 |
| Regarded as having been allowed HLI additional deduction in the year of assessment | No |
Ms. Lee and her friend own a dwelling in Hong Kong as tenants in common. She and her friend respectively hold 40% and 60% interest in the property. The property was exclusively used as Ms. Lee’s principal place of residence during the year of assessment 2024/25. The home loan interest (“HLI”) paid in respect of the property for the year from 1 April 2024 to 31 March 2025 was in the total amount of $120,000. Ms. Lee’s child was born on 30 June 2024. She resided with that child in Hong Kong for a continuous period of not less than 6 months during the year of assessment 2024/25. She would like to claim the deduction of HLI and also made an election in writing to claim the deduction of HLI additional deduction.
Deduction allowable for the year of assessment 2024/25
| Ms. Lee | |
| Deduction of HLI | Allowable amount |
| HLI basic deduction | $40,000 [A] [$100,000 (capped by HLI basic deduction ceiling amount) x 40%] |
| HLI additional deduction | $8,000 [B] [$20,000 (capped by HLI additional deduction ceiling amount) x 40%] |
| HLI increased deduction | $48,000 [A]+[B] |
| Regarded as having been allowed HLI additional deduction in the year of assessment | Yes |
Mr. Cheung and Mrs. Cheung jointly own a dwelling in Hong Kong. The property was exclusively used as their principal place of residence during the year of assessment 2024/25. They paid home loan interest (“HLI”) of $150,000 for the year from 1 April 2024 to 31 March 2025. Their child was born on 30 June 2024. They resided with that child in Hong Kong for a continuous period of not less than 6 months during the year of assessment 2024/25. They are eligible to claim the deduction of HLI. Mr. Cheung made an election in writing to claim the deduction of HLI additional deduction for the year of assessment 2024/25. Mrs. Cheung, however, did not made that election.
Deduction allowable for the year of assessment 2024/25
| Mr. Cheung | Mrs. Cheung | |
| Deduction of HLI | Allowable amount | Allowable amount |
| HLI basic deduction | $50,000 [A] [$100,000 (capped by HLI basic deduction ceiling amount) x 50%] |
$50,000 [C] [$100,000 (capped by HLI basic deduction ceiling amount) x 50%] |
| HLI additional deduction | $10,000 [B] [$20,000 (capped by HLI additional deduction ceiling amount) x 50%] |
$0 [D] (Mrs. Cheung did not make an election) |
| HLI increased deduction | $60,000 [A]+[B] | $50,000 [C]+[D] |
| Regarded as having been allowed HLI additional deduction in the year of assessment | Yes | No |
Mrs. Ho is a sole owner of a dwelling in Hong Kong. She is a housewife and does not have any source of income. The property was the principal place of residence of Mrs. Ho and her spouse, Mr. Ho, during the year of assessment 2024/25. Mrs. Ho nominated Mr. Ho to claim the deduction of the home loan interest (“HLI”) in relation to her HLI paid in the amount of $200,000 for the year from 1 April 2024 to 31 March 2025. Their child was born on 30 June 2024. They resided with that child in Hong Kong for a continuous period of not less than 6 months during the year of assessment 2024/25. Mrs. Ho made an election in writing to claim the deduction of HLI additional deduction for the year of assessment 2024/25.
Deduction allowable for the year of assessment 2024/25
| Mr. Ho | Mrs. Ho | |
| Deduction of HLI | Allowable amount | Allowable amount |
| HLI basic deduction | $100,000 [A] (capped by the HLI basic deduction ceiling amount) |
$0 [C] (Mrs. Ho had nominated Mr. Ho for the HLI deduction) |
| HLI additional deduction | $20,000 [B] (capped by the HLI additional deduction ceiling amount) |
$0 [D] (Mrs. Ho had nominated Mr. Ho for the HLI deduction) |
| HLI increased deduction | $120,000 [A]+[B] | $0 [C]+[D] |
| Regarded as having been allowed HLI additional deduction in the year of assessment | N/A (Mr. Ho is not the owner of the property. Hence, no HLI additional deduction can be allowed to him even if he elects for it.) |
Yes |
Mr. Wong was not a married person in the year of assessment 2024/25. He entered into a qualifying tenancy in respect of a residential flat (“the tenancy”). He lived in the flat and paid total rent of $60,000 for the period from 1 April 2024 to 30 June 2024 (termination date of the tenancy). He acquired his solely owned property on 1 July 2024. The property has been used as his principal place of residence since then. The home loan interest (“HLI”) paid in respect of the property for the period from 1 July 2024 to 31 March 2025 was in the total amount of $150,000. His child was born on 30 June 2024. He resided with that child in Hong Kong for a continuous period of not less than 6 months during the year of assessment 2024/25. He would like to claim deductions of domestic rent (“DR”) and HLI, and also made an election in writing to claim DR and HLI additional deductions.
Deduction allowable for the year of assessment 2024/25
(a) Deduction of DR
| Rent paid under the tenancy | No. of tenant | Qualifying rental amount | Maximum deduction | No. of months in contractual period | Deduction ceiling | Prescribed deduction amount (i.e. allowable deduction) | |||
| [A] | [B] | [C = A/B] | [D] | [E] | [F = D x E/12÷B] | [G = Lesser of C or F] | |||
| $60,000 | 1 | $60,000 | Basic | $100,000 | 3 | Basic | $25,000 | $30,000 | |
| Additional | $20,000 | Additional | $5,000 | ||||||
| Total | $120,000 | Total | $30,000 | ||||||
“Basic” means DR basic deduction
“Additional” means DR additional deduction
(b) Deduction of HLI
| Mr. Wong | |
| Deduction of HLI | Allowable amount |
| HLI basic deduction | $100,000 [H] (capped by the HLI basic deduction ceiling amount) |
| HLI additional deduction | $20,000 [I] (capped by the DR additional deduction ceiling amount) |
| Total allowable deduction of HLI | $120,000 [H]+[I] = [J] |
(c) Overall position
| Deduction allowable for the year of assessment 2024/25 | |
| DR increased deduction | $30,000 [G] |
| HLI increased deduction | $120,000 [J] |
| Total allowable deduction | $150,000 |
| Regarded as having been allowed the deduction of HLI/DR additional deduction in the year of assessment | Yes |