12. I paid for rents for my place of residence. Is this deductible?
Domestic rent paid by a taxpayer for a qualified tenancy of a home used as the taxpayer's place of residence is deductible effective from 2022/2023 onwards. If there is a qualifying domestic tenancy, the taxpayer may be able to deduct the rent paid by his or her spouse (who is not residing apart from the taxpayer). In general, the maximum deduction for the tenancy is $100,000 for each year of assessment, subject to reduction of the ceiling in proportion to the number of co-tenants or, if the tenancy period covers only a portion of a year of assessment, in proportion to the period of tenancy falling within the year of assessment.
To be eligible for the deduction, a written tenancy (or subtenancy) must be obtained for any domestic property and must be stamped in accordance with the Stamp Duty Ordinance (Cap. 117), with the exception of any domestic property leased by the government or the Financial Secretary Incorporated acting as the government's agent at a rent equal to the property's fair market value.
A deduction for domestic rents will not be allowed if:
- the taxpayer or the taxpayer’s spouse (who is not living apart from the taxpayer) is a legal and beneficial owner of any domestic premises in Hong Kong;
- the landlord of the rented property is an associate of the taxpayer or the taxpayer’s spouse (e.g. the landlord is the taxpayer’s spouse, or a parent, child, sibling or partner of the taxpayer or the taxpayer’s spouse, or a corporation controlled by the taxpayer or the taxpayer’s spouse);
- the taxpayer or the taxpayer’s spouse (who is not living apart from the taxpayer) is provided with a place of residence by his / her employer or an associated corporation of the employer (including those who receive a refund of any rent paid);
- the taxpayer or the taxpayer’s spouse (who is not living apart from the taxpayer) is a tenant or an authorised occupant of a public rental housing flat of the Hong Kong Housing Authority or the Hong Kong Housing Society;
- the premises concerned are prohibited from being used for residential purposes; or the tenancy is prohibited by any law or a Government lease;
- the rents are allowable as a deduction under any other provision of the Inland Revenue Ordinance; or
- the taxpayer or the spouse has entered into a lease purchase agreement in respect of the premises.
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