The cost of owning property in Hong Kong

For most buyers, the purchase price is only the first number that matters. The true cost of owning a flat in Hong Kong is the sum of several recurring charges that, taken together, often add 1–2% of the property’s value to your annual outlay — and that is before you account for mortgage interest. This page runs through every cost you will face after completion, then shows a worked annual total so you can see the real scale.

Rates and government rent

Rates and government rent are the two charges collected by the Rating and Valuation Department (RVD). They are both calculated as a percentage of the property’s rateable value — an estimate of the annual rental income the flat could achieve if let, revalued each year on 1 October and effective from the following 1 April. You pay rates on almost every property. Whether you pay government rent depends on the lease of the land.

Rates

For the 2026-27 financial year, the rates charge is:

• 5% of rateable value for domestic flats with a rateable value at or below $550,000.
• For domestic flats with a rateable value above $550,000, a progressive banding applies: 5% on the first $550,000, 8% on the next $250,000, and 12% on the portion above $800,000. Non-domestic properties remain at a flat 5%.

The RVD revalues all properties annually. So even if your rateable value rises purely because the market rental has increased, your rates bill rises with it. You can check your current rateable value on your demand note or via the RVD’s online enquiry service.

Government rent

Government rent is 3% of the rateable value, adjusted whenever the rateable value changes. It is payable only on land in the New Territories and New Kowloon north of Boundary Street, and on leases extended under the New Territories Leases (Extension) Ordinance. If your flat is on Hong Kong Island or in Kowloon south of Boundary Street under a pre-27 May 1985 lease, the government rent is handled by the Lands Department instead — you will still pay it, but at the rate and schedule that department sets. If you are buying a newly built flat in any location, the developer’s land grant will specify whether government rent applies. Your solicitor or conveyancer will confirm this before completion.

Management fee and sinking fund

The management fee covers day-to-day operation of the building: security, cleaning, lift maintenance, common-area electricity, and the wages of the management staff. It is set by the owners’ corporation (or the developer, before the corporation is formed) and is typically based on the saleable area of your flat, sometimes with a fixed element plus a per-square-foot charge. Most buildings also require a monthly contribution to a sinking fund — a reserve that pays for major repairs and replacements such as lift overhauls, repainting, or water-pipe replacement.

Management fees vary enormously. A small flat in an older building may pay $2 per square foot per month; a luxury estate may charge $6–8 per square foot or more. These fees are set by a resolution of the owners’ corporation and can increase from one year to the next. The initial fee offered by the developer for a new building is often a low “early bird” rate that rises sharply after the first few years. Ask for the current management fee budget and sinking-fund balance before you buy.

Building insurance

The owners’ corporation will hold a block insurance policy covering the structure of the building and common areas. Your share of the premium is included in the management fee. Separately, you need your own contents and home insurance for fixtures that belong to you — kitchen cabinets, flooring, light fittings — and your personal belongings. This is typically a few hundred dollars per year for a small flat. It is not mandatory, but it is wise; your mortgage lender may also require it.

Maintenance and major renovation orders

Routine maintenance — fixing a leak, repainting a room, repairing your air conditioner — is your own expense. Most owners budget about 0.3–0.5% of the flat’s value per year for this. But the cost that catches many unprepared is a mandatory renovation order issued by the Buildings Department under the Mandatory Building Inspection Scheme (MBIS) or the Mandatory Window Inspection Scheme (MWIS). If the owners’ corporation is ordered to carry out a major structural repair, your share of the cost can be tens of thousands of dollars in a single year. There is no cap. A lift replacement, for instance, can cost $1–2 million per lift shaft; split among the owners in a 50-flat building, that is $20,000–40,000 per flat. The only way to protect yourself is to ensure the sinking fund is well-funded and to read the latest inspection report for the building.

Property tax if you let the flat

If you rent out your flat, you must declare the rental income and pay property tax. For the year of assessment 2025/26, the standard rate is 15%. The charge is on the net assessable value:

• Start with the gross rent received (including any service charges or fees paid by the tenant).
• Deduct the rates you paid for the period the flat was let.
• Then deduct a flat 20% statutory allowance for repairs and outgoings (you do not need to provide receipts; it is automatic).
• The remaining amount is the net assessable value, and you pay 15% on that.

Example: if the annual rent is $240,000 and you paid $12,000 in rates, the net assessable value is ($240,000 − $12,000) × 80% = $182,400, and property tax is $182,400 × 15% = $27,360. If the flat is not let for the full year, the property tax calculation is pro-rated.

Mortgage servicing

Your mortgage repayment is not a running cost of ownership in the same way as the items above, but it is the largest monthly outflow for most owners. The standard repayment method is a reducing-balance loan over 30 years (though terms vary). For a hypothetical flat costing $6 million with a 70% loan ($4.2 million) at an interest rate of, say, 4% per annum, the monthly repayment would be approximately $20,000. That is $240,000 a year. The exact figure depends on your loan amount, interest rate, and repayment term — always check the latest HIBOR and prime rates, and factor in that rates can rise.

Worked annual total

Take a typical 500-square-foot flat in a mid-tier estate in Kowloon. Hypothetical figures only, for illustration:

That is about $4,200 per month in running costs alone before putting food on the table. The mortgage adds another $20,000 per month. Owners who underestimate the “small” items — particularly management fee rises and unplanned building repairs — can find themselves under pressure.

What to do next

Before you sign a sale-and-purchase agreement:

• Ask the vendor or the agent for the last two years’ worth of management fee accounts and the sinking fund balance.
• Check the most recent building inspection report, if one exists under the MBIS, and ask whether any major works are planned or ordered.
• Verify the rateable value of the flat on the RVD’s website — it will tell you your exact annual rates and government rent bills.
• If you plan to rent the flat out, get a property tax estimate from the Inland Revenue Department or your accountant.
• Confirm your mortgage affordability at a stress-tested interest rate, not the current promotional rate.

Each of these subjects is covered in its own detail page: rates and how they are calculated, government rent and land leases, management fees and the owners’ corporation, and property tax on rental income. The numbers here are based on the 2026-27 rates from the RVD and the 2025/26 property tax rate from the IRD — confirm the latest figures with the respective authorities before committing.