Progressive Rating System for Domestic Tenements
1. What is the progressive rating system for domestic tenements?
To further uphold the “affordable users pay” principle, the Government has proposed applying higher rates percentage charge(s) to domestic tenements with rateable value over $550,000 (equivalent to a monthly rental of around $46,000). Accordingly, rates will be charged at 5% of the rateable value on the first $550,000 and at 8% of the rateable value on the next $250,000, and then at 12% on the portion of rateable value exceeding $800,000.
For domestic tenements with rateable value of $550,000 or below, rates will continue to be charged at 5% of the rateable value.
The above progressive rating system will be implemented with effect from the fourth quarter of the financial year, i.e. January-March quarter of 2025.
2. How to calculate the amount of rates payable of domestic tenements subject to progressive rating system?
For domestic tenements with rateable value of $550,000 or below, rates will continue to be charged at 5% of the rateable value.
For domestic tenements with rateable value over $550,000, rates will be charged at 5% of the rateable value on the first $550,000 and at 8% of the rateable value on the next $250,000, and then at 12% on the portion of rateable value exceeding $800,000.
For domestic tenements subject to progressive rates, the amount of progressive rates payable for the January-March quarter of 2025 will be shown in the demands for that quarter. Members of the public can also use the “Rates and Government Rent Calculator” available on the website of Rating and Valuation Department (the Department) to estimate the amount of rates (including progressive rates where applicable) and Government rent payable for the latest three years of assessment. For details, please visit the Department’s website.
3. How to define a domestic tenement?
Buildings and properties are generally classified according to the use specified on the occupation permits. The Department classifies a tenement which is wholly or primarily used for dwelling purposes as domestic, having regard to, among others, its mode and character of occupation.
4. Does the progressive rating system for domestic tenements apply to domestic car parks?
The proposed progressive rating system for domestic tenements is also applicable to domestic car parking tenements (including those that are separately assessed).
5. How do I know if my property will be subject to the progressive rating system for domestic tenements?
Rates and Government rent demands to be issued in early April 2024 will show the rateable values for 2024-25 after revaluation. Besides, the rateable value of tenements contained in the 2024-25 Valuation List and Government Rent Roll will be available for inspection on the Department's website or the Property Information Online website (www.rvdpi.gov.hk) during the period from late March to 31 May 2024.
If the 2024-25 rateable value of a domestic tenement is over $550,000, progressive rates will be payable starting from the fourth quarter of 2024-25, i.e. January to March 2025.
The Department will also notify ratepayers concerned in April 2024 that the tenement will be subject to payment of progressive rates in the fourth quarter of 2024-25, and remind them that if they are not satisfied with the 2024-25 rateable value, they may object by submission of a proposal to the Department on or before 31 May 2024. Whether progressive rates should be payable for subsequent years of assessment will depend on the rateable value for the relevant year(s).
6. What is rateable value?
Please refer to the Rates section under Our Services for details.
7. Can a ratepayer object to the rateable value of his property? How to make an objection?
Please refer to the Rates section under Our Services for details.
8. After the progressive rating system comes into effect, will the amount of rates payable of a domestic tenement be calculated in accordance with the new system if it is first assessed to rates?
The rates payable of a domestic tenement first assessed to rates following an interim valuation may cover more than one assessment year. Hence, the amount of rates payable for the domestic tenement will be calculated in accordance with its rateable value and the rates percentage charge(s) for the relevant assessment years. Progressive rates are only levied starting from the fourth quarter of 2024-25, i.e. January to March 2025, on domestic tenements subject to progressive rating.
9. After the progressive rating system comes into effect, how to calculate the amount of rates payable for the constituent portions which form a single tenement?
Rates are charged at specified percentage(s) of the rateable value of a tenement on the Valuation List. For a single tenement on the Valuation List that is formed by different constituent portions, the amount of rates payable for each constituent portion is apportioned based on its respective share of apportioned rateable value relative to that of the single tenement.