The Economy
Owners of land and buildings in Hong Kong are charged property tax at the standard rate (15 per cent in 2013-14) on the actual rent received after an allowance of 20 per cent for repairs and maintenance. There is a system of provisional payment of tax similar to that for profits tax and salaries tax. Properties owned by a corporation carrying on a business in Hong Kong are exempt from property tax, but the profits it derived from the properties are chargeable to profits tax. Property tax contributed some $2.6 billion (about 0.6 per cent of total government revenue) in 2013-14.
Stamp duty is imposed on different classes of documents relating to transfers of immovable property, leases and transfers of shares under the Stamp Duty Ordinance. In 2013-14, the revenue from stamp duties was some $41.5 billion, or about 9 per cent of total government
revenue.
Betting duty is charged on the net stake receipts from betting on horse races and football matches and on the proceeds of Mark Six lotteries, all administrated by the Hong Kong Jockey Club. In 2013-14, the rates of betting duty for local bets on local horse races were 72.5 per cent on the first $11 billion of net stake receipts; 73 per cent, 73.5 per cent, 74 per cent and 74.5 per cent for each segment of $1 billion thereafter; and 75 per cent on the remainder. For local bets on non-local horse races, betting duty was charged at a uniform rate of 72.5 per cent on the net stake receipts. The rate of betting duty on football matches was 50 per cent on the net stake receipts. The rate of betting duty on Mark Six lotteries was 25 per cent on the proceeds. The yield from betting duty in 2013-14 totalled some $18.1 billion, about 4 per cent of total government revenue.
Under the Dutiable Commodities Ordinance, excise duties are levied on only four types of commodities to be consumed locally (hydrocarbon oil, liquor, methyl alcohol and tobacco), irrespective of whether they are manufactured locally or imported. The Customs and Excise Department collects these duties, which totalled $9.72 billion in 2013-14 (about 2 per cent of total government revenue).
The Rating and Valuation Department is responsible for the billing and collection of rates, which are levied on landed properties at a specified percentage of their rateable values (5 per cent in 2014-15). The rateable value of a property is an estimate of its annual open market rent at a designated date. Rateable values are reviewed each year to better reflect prevailing market rents. The current Valuation List, containing about 2.4 million assessments, took effect on 1 April 2014, with rateable values reflecting the rental values on 1 October 2013. The revenue from rates in 2013-14 was $14.9 billion, accounting for about 3 per cent of total government revenue.
The Rating and Valuation Department is also responsible for the billing and collection of government rent for properties held under land leases granted on or after 27 May 1985, or on the extension of non-renewable land leases. Government rent is levied at 3 per cent of the rateable value of the property and is adjusted in step with any subsequent changes in the rateable value. There were about 1.9 million assessments in the Government Rent Roll on 1 April 2014. Total government rent collected in 2013-14 was $8.6 billion, or about 1.9 per cent of total government revenue.
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