Hong Kong: Proposed tax deduction for rent paid for domestic premises

A pending legislative proposal would provide a tax deduction for domestic rental payments

A pending legislative proposal would provide a tax deduction for domestic rental payments

A pending legislative proposal would provide a tax deduction for domestic rental payments, effective from year of assessment 2022-2023.  The maximum deduction for rents paid for eligible domestic premises would be HK$100,000 per year of assessment.

Because this proposed measure could affect 2022-2023 provisional tax assessments, a claim for a tax deduction could be made with the 2021-2022 individual tax return. 


The pending legislation—the “Inland Revenue (Amendment) (Tax Deductions for Domestic Rents) Bill 2022”—was introduced before the Legislative Council in early May 2022. The bill would provide a new deduction for domestic rents under both the salaries tax and the tax charged under personal assessment (as proposed in the 2022-2023 budget).

To qualify for the deduction, taxpayers would need to satisfy a number of specified conditions including: 

  • The relevant domestic premises would need to be the taxpayer’s principal place of residence.
  • The taxpayer or his/her spouse could not be a legal and beneficial owner of any domestic premises in Hong Kong.
  • The taxpayer or his/her spouse is not provided with a place of residence by his/her employer.
  • The rent must be paid by the taxpayer or his/her spouse.
  • The tenancy for that domestic premises must be stamped under the stamp duty ordinance.

Domestic rent paid under a sub-lease agreement also would qualify for the deduction, but not under lease-purchase agreements.

KPMG observation

Assuming the bill is enacted, individual taxpayers could claim a tax deduction for domestic rents for the year of assessment 2022-2023 onwards, with a ceiling of HK$100,000 for each year of assessment.

The exclusion of individuals with housing provided by their employer would mean that those claiming rental reimbursement would not be eligible for a further deduction.  However, in most instances, the benefit of rental reimbursement arrangements would likely exceed the benefit of the deduction. In any event, tax professionals believe that employers would not be deterred from making the most of such arrangements for their employees’ benefit.  

For more information contact a KPMG tax professional:

David Ling | davidxling@kpmg.com


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