On October 23, 2024, the Legislative Council of Hong Kong SAR approved the Rating (Amendment) Bill 2024, which introduces a progressive rating system for domestic tenements with a rateable value (RV) exceeding HKD 550,000, effective from the fourth quarter of the 2024-25 fiscal year. For properties with an RV of HKD 550,000 or less, the rate remains at 5%. The new system will charge 5% on the first HKD 550,000, 8% on the next HKD 250,000, and 12% on any value exceeding HKD 800,000. Non-domestic properties will be exempt from this system. Additionally, the Council reinstated the hotel accommodation tax (HAT) at a rate of 3%, effective January 1, 2025, after it had been suspended since July 1, 2008. The new rates will be reflected in quarterly demands issued to ratepayers starting in December 2024.
Legislative Council in Hong Kong passed resolution to resume collection of Hotel Accommodation Tax (HAT) at 3% rate from January 2025
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Author: Ivana Picajkić
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On October 23, 2024, the Legislative Council of Hong Kong SAR approved the Rating (Amendment) Bill 2024, which introduces a new progressive rating system for domestic tenements with a rateable value (RV) exceeding HKD 550,000, effective from the fourth quarter of the 2024-25 fiscal year. Additionally, the Council passed a resolution to resume the collection of hotel accommodation tax (HAT) starting January 1, 2025.
Historically, rates were charged at a flat 5% on the annual rateable value (RV) of properties, reflecting their rental value. To promote the "affordable users pay" principle and increase revenue, the financial secretary announced a progressive rating system in the 2022-23 Budget.
This new system will apply only to domestic properties with an RV exceeding HKD 550,000. For properties with an RV of HKD 550,000 or less (about 98% of private domestic properties), the rate remains at 5%. Rates are paid quarterly and the new system will start in the fourth quarter of the 2024-25 fiscal year (January to March 2025).
The progressive rating system applies to properties primarily used for residential purposes, including parking spaces for owners or occupants. Non-domestic properties used for business or social services (like hotels and childcare centers) are exempt from this system.
Multiple domestic units may be assessed as a single entity ("en-bloc") by the Rating and Valuation Department based on various factors. Certain en-bloc properties, such as public rental housing and dormitories from nonprofit schools or religious institutions, will be excluded from the new rating system.
The Legislative Council also passed a resolution to reinstate the collection of the hotel accommodation tax (HAT) at a rate of 3% starting January 1, 2025. HAT is applied to accommodation charges paid by guests at hotels and guesthouses. This tax has been effectively suspended since July 1, 2008, when the rate was lowered to 0%.
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