HK Rental Tax Deduction Calculator

To ease the financial burden of residential tenants in Hong Kong's high-cost housing market, the Government enacted Section 26RV of the Inland Revenue Ordinance (Cap. 112), providing an allowable deduction for domestic rental expenses for taxpayers chargeable to salaries tax or tax under personal assessment.

Under this statutory concession, eligible tenants renting private residential premises as their principal place of residence can claim a tax deduction of up to HK$100,000 per year of assessment. Because the deduction reduces your Net Chargeable Income before applying progressive tax brackets (2% to 17%), a tenant in the top 17% bracket saves up to HK$17,000 in cash tax annually.

To qualify, the tenancy agreement must be formally stamped with the IRD Stamp Duty Office, the rented premises must be used as your domestic residence, and neither you nor your spouse can be the owner of any residential property in Hong Kong. Explore our comprehensive Hong Kong Property Tax & Rental Guide, review lease stamping rules in the Tenancy Agreement Stamp Duty Guide, and compare with employer housing in our Rental Reimbursement Scheme Guide.

Calculate your exact salaries tax savings under Section 26RV:

1. Enter Gross Annual Employment Income: Input your total annual salaries, bonuses, and taxable allowances in Hong Kong Dollars (HK$).
2. Enter Monthly Rent Paid: Input your monthly tenancy rent for your principal domestic flat in Hong Kong.
3. Input Number of Tenancy Months: Specify how many months during the tax year (April 1 to March 31) you rented the premises (maximum 12 months).
4. Enter Co-Tenants Sharing the Lease: If you co-sign the lease with room-mates or flat-mates, enter the number of co-tenants (the HK$100,000 cap is apportioned equally).
5. Click Calculate: Instantly inspect your allowable deduction, reduction in Net Chargeable Income, and net cash tax saved.

The calculation output itemizes the exact tax savings generated by your domestic tenancy:

The allowable deduction under Section 26RV is determined by the following statutory principles:

• Full 12-Month Tenancy: Maximum deduction is HK$100,000 for a sole tenant.
• Part-Year Tenancy: If a lease starts on October 1 (6 months tenanted in the fiscal year ending March 31), the maximum deduction ceiling is pro-rated to HK$50,000 (HK$100,000 × 6 / 12).
• Co-Tenancy Apportionment: If 2 flatmates co-sign a tenancy agreement, each tenant can claim up to HK$50,000 (HK$100,000 ÷ 2).

To see how the rental deduction impacts different taxpayer profiles:

• Accurate Section 26RV Logic: Fully implements the HK$100,000 ceiling, month-by-month pro-rating, and co-tenancy division formulas.
• Real Cash Savings Breakdown: Computes the exact cash difference in your final IRD salaries tax assessment.
• Marginal Bracket Clarity: Shows exactly how the deduction reduces income in your highest applicable progressive slab.
• Full Hong Kong Tax Spiderweb: Connected to our Property Tax Guide, Salaries Tax Guide, and Tenancy Stamping Guide.

• Commercial and Parking Leases: Leases for pure commercial, industrial, or standalone car parking spaces (not leased with the residential unit) are not deductible.
• Sub-Leases and Illegal Structures: Tenancies of illegal rooftop structures or partitioned flats without proper building compliance may face IRD audit scrutiny.
• Standard Rate Cap: Taxpayers assessed under the 15% standard rate method cannot claim personal deductions (only MPF is deductible from Net Assessable Income).

To successfully claim the deduction on your annual BIR60 tax return, you must satisfy all statutory conditions under Section 26RV:

• Unstamped Tenancy Agreements: Section 26RV explicitly mandates that the tenancy agreement must be stamped. Informal oral leases or unstamped handwritten agreements are strictly rejected by the IRD.
• Double-Dipping with Employer Housing Schemes: If your employer provides staff quarters or reimburses rent under an official Rental Reimbursement Scheme, you cannot claim the Section 26RV deduction.
• Spouse Owning a Property: Even if you do not own real estate, if your legally married spouse owns a residential flat in Hong Kong (regardless of whether you live together in the rented flat), you are disqualified from claiming this deduction.
• Renting from Family Members: Tenancies rented from parents, children, brothers, sisters, or controlled corporations do not qualify for the domestic rental tax deduction.
• Throwing Away Rent Receipts: While you do not need to attach rent receipts when filing Form BIR60 via eTAX, Section 51C requires you to retain all stamped leases, rental receipts, and bank payment slips for at least 6 years for random IRD compliance audits.

• Inland Revenue Department — Domestic Rent Deduction FAQ — Departmental Guidelines on Section 26RV
• GovHK eTAX Portal — Online Tax Filing (Form BIR60) & Electronic Stamping
• Inland Revenue Department — Stamp Duty Office — Tenancy Agreement Stamping Guidelines

Retain stamped tenancy agreements, rent receipts, and bank payment records for at least 6 years under Section 51C of the Inland Revenue Ordinance.