TAX DEDUCTION BILL TO BE GAZETTED

The Inland Revenue (Amendment) (Tax Deductions for Domestic Rents) Bill 2022 will be gazetted on May 6 and introduced into the Legislative Council on May 11.

The bill seeks to implement the tax deduction for domestic rent proposed in the 2022-23 Budget. The Government hopes to secure the passage of the bill before the council’s summer recess so that the measure could be implemented from the 2022-23 year of assessment.

It is expected to benefit about 430,000 taxpayers. The government revenue forgone will amount to about $3.3 billion per year.

A taxpayer liable to salaries tax or tax under personal assessment may claim a deduction for the rent paid by them or their spouses as tenants or co-tenants in relation to the relevant year of assessment for renting eligible domestic premises. The maximum amount of allowable deduction is $100,000 for each assessment year.

The premises concerned must be the taxpayer's principal place of residence, and the relevant tenancy must be stamped.

Eligible taxpayers can provide information about the expected domestic rent paid in relation to 2022-23 in the tax returns for the 2021-22 year of assessment to be issued this June.

Upon passage of the bill, the Inland Revenue Department will take into account the deduction when assessing the provisional salaries tax for 2022-23.

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