Hong Kong: Proposals to grant tax deduction for lease reinstatement costs, remove time limit for claiming building allowances
Government proposes that the measures be effective from the year of assessment 2024/2025
Government proposes that the measures be effective from the year of assessment 2024/2025
The Hong Kong government recently announced in the 2024/2025 budget speech that it will introduce measures to:
- Grant a tax deduction for lease reinstatement costs, subject to certain conditions
- Remove the 25-year time limit for claiming the commercial building allowance (CBA) and industrial building allowance (IBA) and allow a buyer of a commercial or industrial building to claim the CBA or IBA on a 4% annual basis without any time limit. The tax base for the buyer to claim the annual allowances would be the same as the current practice (i.e., the residue of expenditure immediately after the sale plus any balancing charge imposed on the seller). For background read TaxNewsFlash
The government subsequently released a briefing paper for the Legislative Council detailing the proposed measures.
The government proposes that the measures be effective from the year of assessment 2024/2025 and plans to introduce a bill with the necessary legislative amendments to the Legislative Council in the 4th quarter of 2024.
For more information, contact a KPMG tax professional:
David Ling | davidxling@kpmg.com
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