Hong Kong: IRD releases notice on tax obligations of property owners

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On 15 June 2017, the Hong Kong Inland Revenue Department (IRD) issued a notice on the property tax obligations of property owners. Property tax is charged on property owners by reference to the actual rent receivable (including lease premium) in the relevant year of assessment. Owners in receipt of rental income must inform the tax department in writing if they are liable to tax and supply the particulars of the property not later than 4 months after the end of the basis period for the year of assessment (e.g. on or before 31 July 2017 for the year of assessment 2016/17), unless they have already received the appropriate tax returns.

A return issued by the IRD should be completed and furnished to the IRD within the stipulated time limit for official record updating purposes even if no rental was received in respect of the property concerned. Owners chargeable to property tax must keep sufficient rent records, such as lease agreements and duplicates of rental receipts for at least 7 years. They must inform the Department of any change of address in writing within one month.

Where a corporation has been exempted from property tax and there is a change in the ownership or use of the property, or in any other circumstances which may affect such exemption, the corporation must notify the Department in writing of the change within 30 days after the event. Heavy penalties may be incurred for failure to comply with the requirements of the Inland Revenue Ordinance.

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