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 applies higher rates percentage charge(s) to domestic tenements with rateable value over $550,000 (equivalent to a monthly rental of around $46,000). Starting from the 1 January 2025, rates are charged at 5% of the rateable value on the first $550,000, 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 continue to be charged at 5% of the rateable value.
2. When will the progressive rating system for domestic tenements be implemented?
The progressive rating system for domestic tenements has taken effect following the gazettal of the Rating (Amendment) Ordinance 2024 on 1 November 2024. Progressive rates are charged on applicable domestic tenements starting from 1 January 2025.
3. How do I know if my property will be subject to the progressive rating system for domestic tenements?
Members of the public may visit the Department’s website for details of the progressive rating system. Under the progressive rating system for domestic tenements, for domestic tenements with rateable value over $550,000, progressive rates are payable starting from 1 January 2025. The amount of progressive rates charged for applicable domestic tenements is shown on the quarterly demands concerned.
Whether progressive rates will be charged for subsequent years of assessment for a particular domestic tenement will depend on whether its rateable value for the relevant year(s) is above $550,000.
4. How to calculate the amount of progressive rates payable of domestic tenements?
For domestic tenements with rateable value of $550,000 or below, rates continue to be charged at 5% of the rateable value.
For domestic tenements with rateable value over $550,000, rates are charged at 5% of the rateable value on the first $550,000, at 8% of the rateable value on the next $250,000, and then at 12% on the rateable value exceeding $800,000, starting from 1 January 2025.
Starting from the January to March 2025 quarter, the amount of progressive rates charged for applicable domestic tenements is shown on the quarterly demands concerned. Members of the public can also use the “Rates and Government Rent Calculator” available on the Department’s website to estimate the amount of rates (including progressive rates where applicable) and Government rent payable for the latest three years of assessment. For the calculation of the amount of progressive rates payable, please refer to the following examples:
Example 1: Domestic tenements with annual rateable value of $480,000
| Annual rateable value of the domestic tenement [A] |
Rates percentage charge [B] |
Calculation [C = A x B] |
||
|---|---|---|---|---|
| First $550,000 | $480,000 | 5% | $24,000 | |
| Next $250,000 | $0 | 8% | $0 | |
| Remainder | $0 | 12% | $0 | |
| Annual rates payable | $24,000 | [D = Sum of C] | ||
| Rates payable per quarter | $6,000 | [E = D/4] | ||
Example 2: Domestic tenements with annual rateable value of $600,000
| Annual rateable value of the domestic tenement [A] |
Rates percentage charge [B] |
Calculation [C = A x B] |
||
|---|---|---|---|---|
| First $550,000 | $550,000 | 5% | $27,500 | |
| Next $250,000 | $50,000 | 8% | $4,000 | |
| Remainder | $0 | 12% | $0 | |
| Annual rates payable | $31,500 | [D = Sum of C] | ||
| Rates payable per quarter | $7,875 | [E = D/4] | ||
Example 3: Domestic tenements with annual rateable value of $1,200,000
| Annual rateable value of the domestic tenement [A] |
Rates percentage charge [B] |
Calculation [C = A x B] |
||
|---|---|---|---|---|
| First $550,000 | $550,000 | 5% | $27,500 | |
| Next $250,000 | $250,000 | 8% | $20,000 | |
| Remainder | $400,000 | 12% | $48,000 | |
| Annual rates payable | $95,500 | [D = Sum of C] | ||
| Rates payable per quarter | $23,875 | [E = D/4] | ||
5. How to define a domestic tenement?
A tenement under the Rating Ordinance (Cap. 116) is a unit of assessment chargeable to rates as recorded on the Valuation List. The Department considers any relevant specified instrument (including Government grant, deed of mutual covenant, occupation permit or building plan) as well as the mode and character of the occupation of a tenement, in determining whether a tenement is a domestic or non-domestic tenement. A tenement is used, or intended to be used, wholly or mainly for domestic purposes is classified as a domestic tenement.
In general, domestic tenements include typical domestic flats, service apartments, houses, etc., but exclude hotels, guesthouses, child care centres, children’s homes, nurseries, homes for the elderly, orphanages, homes for persons with disabilities, youth hostels, holiday camps, etc.
6. Does the progressive rating system for domestic tenements apply to domestic car parking spaces?
The progressive rating system for domestic tenements is applicable to domestic car parking spaces (including those separately assessed domestic car parking tenements). In general, domestic car parking spaces refer to car parking spaces ancillary to a residential development or the residential portion of a composite development, but exclude fee-paying car parking spaces that are available for rent by the public.
7. What is rateable value?
Please refer to the Rates section under “Our Services”.
8. Can I object to the rateable value of a property? How to make an objection?
General Revaluations are conducted annually. If you consider the rateable value of a tenement not reasonable, you may lodge a proposal in April and May in any year to alter the rateable value of the tenement but any changes in the rateable value will only take effect from 1 April of that year in which the proposal is made. Please note that the Commissioner does not have the discretion to accept late proposals. For more information on the matter, please refer to the “Objections to Rateable Value Under the Rating Ordinance” in Rates section under “Our Services”.
9. Will the amount of rates payable of a domestic tenement be calculated in accordance with the progressive rating 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 year(s). If the rateable value of a domestic tenement is over $550,000, progressive rates are payable starting 1 January 2025.
10. For domestic tenements subject to progressive rates, how to calculate the amount of rates payable for the constituent portions which form a single tenement?
Rates are charged at specified percentage(s) (including progressive rates percentage charges where applicable) of the rateable value of a tenement on the Valuation List. For a single tenement on the Valuation List that is formed by two or more rateable portions, the ratepayer may apply for an apportionment of the rateable value of the single tenement among different rateable portions, so as to facilitate the ratepayer in adjusting the respective share of rates payment attributed to a constituent rateable portion by making reference to its proportion of the apportioned rateable value relative to that of the single tenement.
11. Are there any domestic tenements not subject to the progressive rates?
The following domestic tenements are not subject to progressive rates (i.e. rates continue to be charged at 5% of the rateable value):
- Public rental housing flats:
- public rental housing flats provided by the Hong Kong Housing Authority or the Hong Kong Housing Society; and
- rental housing flats in Tai Hang Sai Estate provided by the Hong Kong Settlers Housing Corporation Limited
- Flats under the public housing scheme known as Light Public Housing or Transitional Housing
- Dormitories that are provided by the following institutions, and in which a substantial portion of the household facilities are designed for shared use:
- non-profit-making registered schools (the dormitories of which are situated within the premises specified in its school registration certificate);
- post-secondary institutions specified in section 2 of the Education Ordinance (Cap. 279);
- the Hospital Authority or The Chinese Medicine Hospital of Hong Kong; and
- religious institutions*
12. The dormitories provided by certain education institutions, religious institutions and Hospital Authority are not subject to the progressive rating system for domestic tenements. What do these dormitories refer to?
A dormitory is normally made up of rooms provided for different households as residence, and in which a substantial portion of the household facilities (such as kitchen facilities and sanitary facilities, etc.) are designed for shared use among different households occupying the dormitory.
13. My domestic property is a dormitory provided by a religious institution and required to pay progressive rates. How to apply for excluding it from the scope of the progressive rating system for domestic tenements?
If you consider your property a dormitory provided by a religious institution, you may submit an application in writing to the Department, quoting the assessment number(s) and the address(es) of the dormitory and the tenement(s) used by the institution for the purpose of public religious worship, and the contact information. You may be required to provide further information to facilitate the processing of your application. For general cases, the application result will be issued within 4 months upon receipt of your application together with the necessary information.
14. If I consider the tenement not subject to the progressive rating system, what can I do?
You may write to the Department to request a review with the following information:
(i) the assessment number of the tenement concerned;
(ii) the address of the tenement concerned;
(iii) the ground(s) and relevant supporting information; and
(iv) the contact information.
For general cases, the review result will be issued within 4 months upon receipt of the review request together with the afore-mentioned information.
If you are not satisfied with the review result, you may write to object to the review result and provide supporting information within 28 days from the issue of the review result. The Department will re-examine your case carefully, taking into account, among others, further information provided by you, and notify you of the Department’s decision in due course.
The request for a review or lodging of an objection will not affect the rates and/or rent payer’s liability to pay rates and/or Government rent by the last day for payment shown on the demands.
15. If I consider the tenement not a domestic tenement, what can I do?
The Department considers any relevant specified instrument (including Government grant, deed of mutual covenant, occupation permit or building plan) as well as the mode and character of the occupation of a tenement, in determining whether a tenement is a domestic or non-domestic tenement. A tenement is used, or intended to be used, wholly or mainly for domestic purposes is classified as a domestic tenement.
If there is a change to the mode and character of occupation or the physical setting or layout of a tenement, you may write to the Department to request a review of the tenement’s classification with the following information:
(i) the assessment number of the tenement concerned;
(ii) the address of the tenement concerned;
(iii) the ground(s) and relevant supporting information; and
(iv) the contact information.
For general cases, the review result will be issued within 4 months upon receipt of the review request together with the afore-mentioned information. If you are not satisfied with the review result, you may write to object to the review result and provide further supporting information within 28 days from the issue of the review result. The Department will re-examine your case carefully, taking into account, among others, further information provided by you, and notify you of the Department’s decision in due course.
The request for a review or lodging of an objection will not affect the rates and/or rent payer’s liability to pay rates and/or Government rent by the last day for payment shown on the demands.