Tax Deduction for Rent Payments from 2026: Deduct Up to HK$100,000 for Residential Rent Plus an Additional HK$20,000 for Childcare — Eligibility, Calculation and Tax Filing Guide

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Rent tax deduction 2026: five things to know before filing your tax return

Last verified: 12 October 2026

• Maximum deduction of HK$100,000: For the 2025/26 tax year, the maximum deduction for residential rent expenses for each eligible taxpayer is HK$100,000.
• Additional HK$20,000 for childcare: An additional deduction of HK$20,000 applies for children born on or after 25 October 2023 who reside in Hong Kong with the taxpayer, raising the maximum deduction to HK$120,000 (effective from the 2024/25 tax year).
• Actual tax savings: At a marginal tax rate of 17%, a full deduction of HK$100,000 saves HK$17,000 in tax; a deduction of HK$120,000 saves HK$20,400.
• Rental agreements must be stamped: Rental agreements must be stamped under the Stamp Duty Ordinance; unstamped agreements are not eligible for deduction.
• Joint tenants must share the limit: Where there is more than one tenant, the maximum deduction is divided equally among them (e.g., HK$50,000 each for two tenants).

Deduction limit calculation Additional deduction for childcare Tax savings calculator Comparison of rental allowances Frequently asked questions

Note: Tax information is based on data published by the Hong Kong Inland Revenue Department (IRD), as of 12 October 2026. For individual cases—especially joint tenancies, mid-year moves, or additional child-related deductions—consult the IRD or a professional tax adviser.

Can rent payments be tax-deductible? What is the residential rent deduction?

The residential rent deduction is a salaries tax allowance introduced by the Hong Kong government from the 2022/23 tax year. Eligible tenants may deduct up to HK$100,000 in annual rent payments from their assessable income. The policy aims to ease the financial burden on households without home ownership amid high rental costs, reducing tax payable under salaries tax or personal assessment.

Note that this is a “deduction”, not a “tax refund” or “subsidy”: it reduces your assessable income, and the actual tax saved equals the deduction amount multiplied by your marginal tax rate. At the 17% tax bracket, a full HK$100,000 deduction saves HK$17,000 in tax.

What is the rent deduction limit? How is the HK$100,000 calculated?

For the 2025/26 tax year, the basic deduction limit for residential rent expenses is HK$100,000 per taxpayer. The actual deductible amount is the lower of “total rent paid during the year” and “the deduction limit”, adjusted according to the number of tenants and lease duration.

In other words, higher rent does not mean higher deduction—the deduction caps at the limit; if rent paid is below the limit, the actual amount paid applies.

New for 2025/26: An extra HK$20,000 deduction for taxpayers living with children

From the 2024/25 tax year, eligible taxpayers living with their children may claim an increased residential rent deduction limit of HK$120,000—HK$20,000 more than the basic HK$100,000 limit. This measure forms part of the government’s tax incentives to encourage childbirth, and the child must have been born on or after 25 October 2023.

At the 17% tax bracket, a full HK$120,000 deduction saves HK$20,400 in tax—HK$3,400 more than under the basic limit. Note that the additional deduction must be claimed in writing alongside the basic deduction, and is available for up to 19 tax years in respect of rent deductions (whereas the basic deduction has no time limit).

How much tax can you save with the rent deduction? Try our calculator.

Enter your monthly rent, tax bracket and number of tenants to estimate your annual deductible rent and tax savings. For calculations involving the child-related additional deduction or leases shorter than one year, expand “Advanced Settings”.

Below are estimated tax savings for common scenarios (assuming a 17% marginal tax rate):

Who qualifies? Five key conditions

To successfully claim residential rent deduction, all the following conditions must be met:

• No self-owned property: You and your spouse must not own any residential property in Hong Kong during the relevant period (including sole, joint or corporate ownership).
• Principal place of residence: The rented premises must be your principal place of residence; if more than one unit is rented, only the one used for daily living qualifies.
• Stamped tenancy agreement: A written tenancy agreement must be stamped under the Stamp Duty Ordinance.
• Unrelated landlord: The landlord must not be a connected person (spouse, parent, child, sibling, or a company controlled by you or your spouse).
• Not an employment benefit: Neither you nor your spouse receives accommodation from your employer or an associated company, nor is the rent paid or reimbursed by your employer.

When does it not apply? Common exclusions

Even if rent is paid, the Inland Revenue Department will not allow residential rent deduction in the following cases:

• Renting a public rental housing unit from the Hong Kong Housing Authority or the Hong Kong Housing Society (as tenant or authorised occupant).
• You or your spouse own any residential property in hong kong.
• Accommodation is provided by your employer, or rent is paid or reimbursed by your employer.
• The landlord is a connected person (relative or company under your or your spouse’s control).
• The tenancy agreement is not stamped, or the tenancy is prohibited by law or government lease terms.
• The tenancy agreement includes a right or option to purchase the property.
• The same rent has already been deducted under another provision of the inland revenue ordinance.

Rent deduction vs. rental reimbursement — which is better?

Many employees confuse “rent deduction” with “rental reimbursement”. Simply put: if you rent and pay rent yourself, you may claim rent deduction; if your employer provides rental reimbursement or pays rent on your behalf, the lower “rental value” is treated as taxable income. Both cannot apply simultaneously to the same residence.

If your tax deduction focus is home loan interest rather than rent, refer to A complete guide to home loan interest deductions; for an overview of all tax-saving methods, refer to The latest tax filing guide.

How to declare on your tax return: e TAX practical guide

On the individual tax return (BIR60), under the “Deductions” section, enter the tenancy period and total rent paid for residential rent expenses. Using the “Tax Easy” (e TAX) electronic filing system is recommended, as it assists with calculations.

• Log in to Tax Easy: Use your tax file number and password, or “i AM Smart”, to log in to e TAX.
• Locate the residential rent section: Enter the tenancy period (e.g., 01/04/2025 to 31/03/2026) and the total rent paid for the year under the Deductions section.
• Additional deduction for childcare: If eligible, you must submit a written claim for the additional deduction on your tax return.
• Retain documents for six years: Keep stamped tenancy agreements, rent receipts (preferably with bank transfer records) for possible verification.

Frequently asked questions (FAQ) on rent deductions

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