Which expenses are tax-deductible from the landlord’s rental income?

The deductible items for property tax are as follows:

1. Payment of rates after deduction of quarterly allowances (if any), but not including government rent.

2. Special allowances for repairs and expenditures. The allowance is 20% of rental income minus rates.

3. The rent that cannot be recovered is confirmed by the documents. If the unrecoverable rent is greater than the assessable value of the property for that year, the remainder can be deducted from the relevant assessable value in the most recent period. Rents that cannot be recovered are those rents that are confirmed cannot be recovered, not rent arrears. The rent that the tenant fails to pay on time is only the delayed rent arrears and cannot be regarded as the rent that cannot be recovered, so it should be included in the assessable value. If the rent that cannot be recovered can be recovered in the end, the recovered amount shall be taxed in the year of recovery.

4. After applying for personal assessment (if favorable), the interest paid on mortgages for earning rental income is limited to 80% of the value after rental income of the property minus the rates.

The above information is for reference only. If in doubt, we welcome your tax inquiries

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