Allowances and deductions for the year of assessment 2021/22
| Allowances | Amount |
| Basic allowance | HK$132,000 |
| Married Person’s allowance | HK$264,000 |
| Child allowance – For each of the 1st to 9th child – For each child born during the year |
HK$120,000 Additional HK$120,000 |
| Dependent brother or sister allowance (for each dependant) | HK$37,500 |
| Dependent parent and grandparent allowance (for each dependant) – Aged 55 or above but below 60 – Aged 60 or above – Below 60 is eligible to claim an allowance under the Government’s disability allowance scheme |
HK$25,000 HK$50,000 HK$50,000 |
| Additional dependent parent and grandparent allowance (for each dependant) – Aged 55 or above but below 60 – Aged 60 or above – Below 60 is eligible to claim an allowance under the Government’s disability allowance scheme |
HK$25,000 HK$50,000 HK$50,000 |
| Single parent allowance | HK$132,000 |
| Personal disability allowance | HK$75,000 |
| Disabled dependant allowance (for each dependant) | HK$75,000 |
| Deductions | Maximum limits |
| Approved charitable donations (each donation not less than HK$100) | 35% of income – allowable expenses – depreciation allowance |
| Qualifying premiums paid under Voluntary Health Insurance Scheme (VHIS) policy (for each insured person) | HK$8,000 |
| Qualifying annuity premiums and tax deductible MPF voluntary contributions | HK$60,000 |
| Expenses of self-education | HK$100,000 |
| Mandatory contributions to recognized retirement schemes | HK$18,000 |
| Home loan interest | HK$100,000 |
| Elderly residential care expenses | HK$100,000 |
| Domestic rent deduction (legislative amendment is required for implementing the tax measure) | HK$100,000 |
Property owner to choose “Property Tax” or “Personal Assessment” is more tax-efficient?
Property tax will be calculated based on the net rental income of each property in the year of assessment, i.e. the annual rental income after deducting rates paid by owner and irrecoverable rent, minus 20% statutory allowance for repairs and outgoings, and then multiplied by 15%.
Owners can choose either property tax or personal assessment, it is recommended to choose the latter. Although the calculation basis is the same, total interest payable to produce rental income can be deducted under personal assessment. However, this does not mean that personal assessment must more tax efficient than property tax since personal assessment is calculated in a progressive tax rate. The result depends on the owner’s income, allowance and deductions in overall.
Should you have any enquiries, please feel free to talk with us.