How should I fill out a property tax return and what is the difference between BIR57 and BIR58?

The Hong Kong property tax season is upon us again and many property owners may be confused about how to fill out their tax returns. In this article, we will explain the Hong Kong property tax return in detail to help you better understand how to fill out a property tax return. The two types of property tax returns are highlighted: “BIR57” is applicable to properties jointly or severally owned by individuals; “BIR58” is applicable to properties owned by corporations or groups.

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Property Tax Returns: “BIR57” and “BIR58”

Property Tax Deductible Items?

Property Tax Returns: “BIR57” and “BIR58

In Hong Kong, there are two main types of property tax returns: “BIR57” and “BIR58”. It is important to understand the target groups and requirements of these two types of tax returns for tax control purposes.

BIR57: Applicable to properties jointly or severally owned by individuals

The BIR57 is a property tax return for individual owners. If you are an individual owner of a property or co-own a property with other individuals, then you should choose the BIR57. When completing the BIR57, you will need to provide the following information:

Personal information about the owner, including name, identification number, address and contact information;

The address of the property, ownership share, rental income and related expenses;

If applicable, changes to the property during the tax filing period, such as the purchase, sale or lease of the property;

If applicable, the deductible property tax items.

BIR58: Applicable to property owned by a corporation or group

Corresponding to BIR57, BIR58 is the property tax return applicable to property owned by a corporation or body of persons. If your property is owned by a corporation, partnership or other group, then you should select BIR58. When completing the BIR58, you will need to provide the following information:

The name, registration number, address and contact information of the corporation or group;

The address, ownership share, rental income and related expenses of the property;

If applicable, changes to the property during the tax filing period, such as the purchase, sale or lease of the property;

The deductible property tax items, if any.

Deductible items for property tax purposes

What are the deductible items for property tax purposes?

There are only three main items that can be deducted to reduce the amount of tax payable in the property tax calculation, as follows:

Rates payable by the landlord, which is a government tax on the property;

Unrecoverable rental income and other receivables related to the property;

20% of the assessed value of the property as a statutory allowance for renovation and operating expenses.

However, in addition to these three deductible items, there are many other expenses paid by the landlord such as property management fees, ground rent, renovation expenses, maintenance costs, insurance premiums, agent commissions and rent collection costs. These fees are not deductible in the calculation of property tax. In addition, it is important to note that irrecoverable rent and other related income are also not deductible for property tax purposes. The above information is for reference only. If you have any questions or inquiries about tax filing (personal tax return, corporate tax return, accountant tax return), you are welcome to contact our professional consultants and we will provide you with free quotation and consultation services later.