Hong Kong Business News

The progressive rating system for domestic tenements will be implemented as proposed in the 2022-23 Budget and take effect from the fourth quarter of 2024-25 onwards, the Government announced today.

The Rating (Amendment) Bill 2024 will be published in the Gazette on May 31 and introduced into the Legislative Council on June 12 to give effect to the proposal.

For domestic tenements with a rateable value (RV) of $550,000 or below, rates will continue to be charged at 5% of the RV.

For domestic tenements with a rateable value exceeding $550,000, rates will be charged at 5% for the first $550,000 and at 8% for the next $250,000, then at 12% for the value exceeding $800,000 of the RV.

Non-domestic tenements, including those tenements occupied for the purpose of business activities or social services such as hotel, children's home, nursery, home for the elderly, youth hostel and holiday camp, will not be subject to the progressive rating system.

The Government noted the progressive rating system endeavours to strike a balance between upholding the “affordable users pay” principle and minimising the number of ratepayers affected, adding that due regard is given to the need to maintain a simple rating system.

The proposal will only affect domestic tenements with an RV exceeding $550,000, i.e. a monthly rent of about $46,000 or above, which accounts for about 1.9% of the total number of private domestic tenements in Hong Kong.

The progressive rates for the applicable cases will be reflected in the quarterly demands for the fourth quarter of 2024-25 to be issued to ratepayers in December. Government revenue will increase by about $820 million each year.

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