Part 8 Deduction for Interest Payments / Domestic Rents
If you do not claim deduction for interest payments / domestic rents for a particular property,
you are not required to report the details of that property and the relevant information under
this part of your tax return.
8.3
Deduction for Interest Payments to Produce Rental
Income from Properties (Part 8.1 for Internet filing)
If you have elected for Personal Assessment (Part 7 of paper return), you may claim
deduction of the interest paid by you during the year in respect of a loan obtained for the
purpose of acquiring a solely / jointly owned or co-owned property in Hong Kong which
was let.
Fill in your share of interest paid. Your share of interest must be proportional to the number
of joint tenants / share of your ownership. Amount allowed for deduction will not exceed the net assessable value of each individual property as proportionately reduced.
Interest payments relating to periods when the property was not let (e.g. occupation
as residence for your own family or vacant) are not deductible.
8.4
Deduction for Home Loan Interest (Part 8.2 for Internet filing)
Deduction for home loan interest can be claimed under Salaries
Tax or Personal Assessment.
You may claim deduction of the interest paid by you in the respect of a loan obtained for the
purpose of acquiring a property in Hong Kong which was used by you as your place of
residence, provided that the loan was secured by a mortgage or charge and the lending
institution providing the loan to you was an approved one.
The deduction of the home loan interest was the interest you
actually paid in the year of assessment, subject to a maximum
amount for the year of assessment as specified. Fill in your
share of total interest paid (boxes [74], [88] & [102] of
paper return).
Your share of interest must be proportional to the number of
joint tenants / share of your ownership. Amount to be allowed
for deduction will be restricted to the prescribed amount as
proportionately reduced.
For the years of assessment up to 2023/24, the maximum amount
is $100,000. Starting from the year of assessment 2024/25, if the
prescribed conditions are met, apart from the aforementioned basic
deduction, you may be allowed an additional deduction capped at the
ceiling amount of $20,000. Hence, coupled with the basic deduction
ceiling amount of $100,000, the increased deduction ceiling amount
is $120,000. Refer to Part 8.6 for the details.
For the basic deduction, the number of years of deduction is 20 years
of assessment, whether continuous or not. However, you are only
entitled to claim the home loan interest additional deduction or
domestic rents additional deduction for an aggregate of 19 years
of assessment, whether continuous or not. Notwithstanding this,
you will not be allowed the home loan interest additional deduction
if home loan interest basic deduction has been allowed to you for
20 years of assessment, regardless of whether any home loan interest
additional deduction has been allowed to determine the amount of
deduction for any of those 20 years.
Ownership of a property is by reference to the registered owners of the property as shown
in the record maintained by the Land Registry.
Spouse nomination: Your spouse who is entitled to a deduction for home loan interest but
has no income chargeable to tax, may nominate you to claim the deduction, see examples
under Scenario 2 and Scenario 3. If your spouse has income from employment, property,
trade, profession or business chargeable to tax, he / she should not make the nomination
but to elect for Joint Assessment or Personal Assessment, see example under Scenario 4.
Examples to show how the parts 'Claim for Deduction for Interest Payments to Produce Rental Income from Properties' and 'Claim for Deduction for Home Loan Interest' are to be completed
Scenario 1: You have 2 solely-owned properties, Property A and Property B. Property
A was used as a residence for the full year and the Property B was let for rental
income also for the full year. Property A was subject to a re-mortgaged loan.
Total interest paid by you:
Property A (1/4/2025 - 31/3/2026) = $142,500 (See Notes for calculation of deductible interest $120,000.)
Property B (1/4/2025 - 31/3/2026) = $240,000
Scenario 2: You have income chargeable to tax. Property A is owned by your spouse
and used by the family as residence. Your spouse does not have income chargeable
to tax and wishes to nominate you to claim interest deduction.
Total interest paid by your spouse:
Property A (1/4/2025 - 31/3/2026) = $120,000
Scenario 3: You and your spouse jointly own Property A for use as the family
residence. Your spouse does not have income chargeable to tax and wishes to
nominate you to claim his / her share of interest.
Total interest paid by you and your spouse:
Property A (1/4/2025 - 31/3/2026) = $120,000 (share per person, $60,000)
Scenario 4: You and your spouse jointly own Property A and Property B, which were
used at different periods as the family residence. Your spouse has income
chargeable to tax.
Total interest paid by you and your spouse:
Property A (1/4/2025 - 30/6/2025) = $30,000 (share per person, $15,000)
Property B (1/7/2025 - 31/3/2026) = $180,000 (share per person, $90,000)
The part 'Details of the Properties Involved' (Parts 8.1, 8.2, 8.3 and 8.4 of paper return) should be completed as:
| Part in paper return |
Scenario | 1 | 2 | 3 | 4 | ||
| 8.1 | Location of Property | Pty A | Pty B | Pty A | Pty A | Pty A | Pty B |
| 8.2(1) | Secured by a mortgage or charge | Yes | Yes | Yes | Yes | Yes | Yes |
| 8.2(2) | A re-mortgaged loan is involved # | Yes | No | No | No | No | No |
| 8.2(3) | My share of ownership | 100% | 100% | 0% | 50% | 50% | 50% |
| 8.3 | My share of interest payments to produce the rental income |
240,000 | |||||
| 8.4(1)(a) | Total home loan interest payments | 142,500 | 120,000 | 120,000 | 30,000 | 180,000 | |
| 8.4(1)(b) | My share of home loan interest payments | 142,500 (see Notes) |
60,000 | 15,000 | 90,000 | ||
| 8.4(2)(a) | Nominated by spouse to claim deduction | No | No | Yes | Yes | No | No |
| 8.4(2)(b) | My spouse's share of ownership |
Not Applicable |
Not Applicable |
100% | 50% | Not Applicable |
Not Applicable |
| 8.4(2)(c) | My spouse's share of home loan interest payments |
Not Applicable |
Not Applicable |
120,000 | 60,000 | Not Applicable |
Not Applicable |
| 8.4(3) | Property was occupied as my residence for FULL YEAR | Yes | Not Applicable |
Yes | Yes | No | No |
# If a re-mortgaged loan is involved, you must complete Section 10 of the Appendix. Please refer to Section 10 of the Appendix in this Guide for details.
Notes:
In Scenario 1 under Part 8.4, you had re-mortgaged Property A to ABC Bank on 1/7/2025 to obtain a new loan of $2.5 million. At that date, the unpaid balance of the old loan was $2 million. The total mortgage interest paid during the year was:
1/4/2025 - 30/6/2025 = $30,000 on old loan
1/7/2025 - 31/3/2026 = $112,500 on new loan
Calculation of the allowable interest: $30,000 + $112,500 x 2,000,000 / 2,500,000 = $120,000 *
* restricted to the deduction limit specified under the Inland Revenue Ordinance
8.5
Deduction for Domestic Rents (Part 8.3 for Internet filing)
(1)
If you are chargeable to Salaries Tax or have tax charged under
Personal Assessment, you may claim deduction of the rents paid
by you or your spouse (not living apart) as a tenant under a
qualifying tenancy (e.g. stamped tenancy agreement) of domestic
premises. The deduction is applicable to the year of assessment
2022/23 and after.
(2)
The rented domestic premises must be used by you as your principal place of residence in Hong Kong.
(3)
For the years of assessment 2022/23 and 2023/24, the maximum
amount of basic deduction allowable to you is, in general,
$100,000. Starting from the year of assessment 2024/25, if
the prescribed conditions are met, apart from the aforementioned
basic deduction, you may be allowed an additional deduction
capped at the ceiling amount of $20,000. Hence, coupled with
the basic deduction ceiling amount of $100,000, the increased
deduction ceiling amount is $120,000. If you are married,
either you or your spouse or both of you are the tenant(s)
of the qualifying tenancy, and both of you elect to use domestic
rents additional deduction ceiling amount, the maximum total amount
of additional deduction allowable to you and your spouse is $20,000.
Refer to Part 8.6 for the details.
(4)
Starting from the year of assessment 2024/25, you are entitled to claim
the domestic rents or home loan interest additional deduction ceiling
amount for an aggregate of 19 years of assessment, whether continuous or not.
(5)
Fill in the total amount of deduction claimed (i.e. basic deduction plus
additional deduction, if applicable) (boxes [84], [98] & [112] of
paper return)
(a)
The amount of deduction allowable in respect of a tenancy is the lesser of (i) the
Qualifying Rental Amount for the tenancy; and (ii) the
deduction ceiling for the tenancy.
(b)
The Qualifying Rental Amount is
(i) the amount of rents paid under the tenancy in relation to the
period, divided by the number of tenants under the tenancy; and
(ii) if the premises are used partly as a place of residence and
partly for other purposes, it is such part of the
amount that is reasonable in the circumstances of the case.
(c)
The deduction ceiling for the tenancy
is the maximum amount of deduction, to be reduced:
(i)
if there is more than one tenant under the tenancy - in proportion
to the number of co-tenants; and / or
(ii)
if the contractual period of the tenancy covers only a part,
but not the whole, of a year of assessment - in proportion
to the contractual period of the tenancy that overlaps with
the year of assessment.
(d)
If you are married and not living apart from your spouse, the total
amount of deduction allowable to you and your spouse is the amount
determined in accordance with paragraph (5)(a) above. You may claim
deduction for the total amount of rents paid by you and / or your
spouse, or in accordance with an agreement on the respective claim
amount reached by you and your spouse, but the amount already claimed
in your spouse's return should be excluded.
(e)
If you are married during part of a year of assessment, the above
principle for determining the total amount of deduction allowable
to you or your spouse (or both of you) will apply to that part of
the year of assessment when you are married.
(f)
If there is more than one qualifying tenancy in relation to a year of
assessment, the amount of deduction allowable to you or the total amount
allowable to you or your spouse (or both of you), for the year of
assessment is the aggregate of the amount determined in accordance with
the above principle for each of the tenancies.
(g)
If there is more than one tenant under a qualifying tenancy, the rents
paid under the tenancy will be taken to have been paid by each of the
co-tenants in equal shares.
(6)
Circumstances in which deduction is not allowed:
(a)
You or your spouse (not living apart):
(i)
is the legal and beneficial owner of any domestic premises in Hong Kong;
(ii)
is provided with a place of residence by employer or an associated corporation of the
employer (including a refund for any rent paid); or
(iii)
is a tenant or an authorised occupant of a public rental housing flat.
(b)
The landlord of the rented property is an associate of you or your spouse (e.g. spouse,
parents, child, brother/sister, partner, or a corporation controlled by you or your spouse,
etc).
(c)
The premises concerned is prohibited from being used for residential purposes or tenancy
is prohibited under any law or a Government lease.
(d)
The rents are allowable as a deduction under any other provision of the Inland Revenue
Ordinance.
(e)
Any rent paid in respect of any other domestic premises has been allowed to you or your
spouse (not living apart) as a deduction for the same period for which the rent is paid.
(f)
You or your spouse has entered into a lease purchase agreement in respect of the
premises.
(7)
More information is available at www.ird.gov.hk/eng/tax/drd.htm.
8.6
Election for using the Home Loan Interest / Domestic Rents Additional
Deduction Ceiling Amount (Part 8.4 for Internet filing)
(1)
From the year 2024/25 onwards, you may elect to use the home loan
interest or domestic rents additional deduction ceiling amount.
You may be allowed the aforementioned additional deduction if the
following conditions are met:
(a)
You reside, during the year of assessment concerned, with your child in Hong Kong for:
(i)
a continuous period of not less than 6 months; or
(ii)
a shorter period that the Commissioner of Inland Revenue
considers reasonable in the circumstances;
(b)
The child:
(i)
was born on or after 25 October 2023; and
(ii)
is, at any time during the year of assessment, under the age of 18;
(c)
The amount of home loan interest paid or the qualifying rental amount
concerned is larger than the home loan interest basic deduction ceiling
amount or the domestic rents basic deduction ceiling amount for the
relevant year of assessment;
(d)
You claim to use in Part 8.4 or 8.5 of your return home loan interest
basic deduction ceiling amount or domestic rents basic deduction
ceiling amount, and their respective additional deductions ceiling
amounts to determine the amount of home loan interest deduction and
domestic rents deduction.
(2)
(a)
If all the conditions under (1) are met and you wish to elect for using
the additional deduction ceiling amount, you are required to enter either
‘1’ or ‘2’ in box [113] of paper return stating the period you are residing
with your child in Hong Kong during the year.
(b)
You may be eligible for using the additional deduction ceiling
amount if you reside with your child in Hong Kong for a period
of less than 6 months. For details, you may refer to frequently
asked question no. 4 at Department’s webpage
(www.ird.gov.hk/eng/faq/adc.htm).
(3)
(a)
If you are married and your spouse is eligible and wishes to elect for
using the additional deduction ceiling amount, you are required to
enter either ‘1’ or ‘2’ in box [114] of paper return stating the period
he/she is residing with the child in Hong Kong during the year.
Your spouse must sign in Part 13 to indicate that he/she agrees to this election.
(b)
Your spouse may be eligible for using the additional deduction ceiling
amount if he/she resides with the child in Hong Kong for a period of
less than 6 months. For details, you may refer to frequently asked
question no. 4 at Department’s webpage (www.ird.gov.hk/eng/faq/adc.htm).
(c)
Even if box [114] of paper return is completed, if your spouse wishes
to claim home loan interest deduction / domestic rents deduction,
he/she is still required to make the claims in his / her own tax
return, and elect to use the additional deduction ceiling amount
(if appropriate).
(May 2026)