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U2_Property_0809_students 0809 1 THE UNIVERSITY OF HONG KONG SCHOOL OF BUSINESS BUSI 0018 – Hong Kong Taxation Unit 2 – Property Tax Coverage 1 Scope of charge 2 Assessable value 3 Computation of property tax 4 Premium 5 Irrecoverable rent 6 Exemption and relief 7 Provisional property tax 8 Hold-over of provisional property tax Learning Objectives After completing this unit, you should be able to: explain the scope of charge of property tax identify the chargeable person of property tax determine the assessable consideration for the right to use a property apply the spreading rule to lump sum premium describe the treatment of irrecoverable rent compute the net assessable value of a property describe exemption and relief for property tax compute the property tax and provisional property tax 1 SCOPE OF CHARGE 1.1 The Charging Section – S.5(1) On owner Of land and buildings Situated in Hong Kong At standard rate On the net assessable value 1.2 Meaning of “Owner” – S.2(1) A person holding land and/or building directly from the government A person who acquires ownership of the land and/or building from the person mentioned above by an assignment or conveyance A beneficial owner A mortgagor A mortgagee in possession
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U2_Property_0809_students 0809 2 Incorporated owner of a building is also held to be “owner” for property tax purpose in D27/98 Activity Mr. Landlord owns a property and lets the property to Miss Tenant. Miss Tenant sub-lets a room inside the property to Mrs. Sub-tenant. Who is subject to property tax? 1.3 Meaning of “Land or Buildings” – S.7A Ordinary meaning of land/buildings Also include: - piers, wharves & other structures - a part of a building 1.4 Meaning of "Situated in Hong Kong" Land/buildings physically located in Hong Kong 2 ASSESSABLE VALUE Consideration in money or money’s worth payable to, to the order of, or for the benefit of the owner in respect of the right to use land/ buildings – S.5B(2) Include any consideration payable in respect of the provisions of any services/benefits in connection with the use of the property – S.5B(6) Assessable value includes: (a) rent (b) any payments for the right of use of premises
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This note was uploaded on 04/07/2012 for the course TAX 101 taught by Professor Ng during the Spring '12 term at HKU.

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