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Property tax is regulated by the Law No.19/78/M
of 12th August, ‘Regulations of Urban Property Tax”, introduced
in 1978. Property tax is levied on the revenues from real
properties in Macao for each year of assessment. The
real properties are defined by the Regulations to exclude
those properties solely for agriculture. The taxpayers under
this Regulation are those who are entitled to any revenue
of the properties. Such taxpayers include the registered owners
of the real properties, or the ones physically occupying the
properties. Chapter 2 of the Regulations clearly defines that
the property tax is generally levied on two categorised real
properties. The first category is referred to the leased properties
of which the levies are based on the actual rental income.
Properties of the second category are those have not been
let, such as owner occupied properties and vacant properties.
Tax is levied on the deemed rental value of such properties
assessed by the relevant authorities.
Article
4 of the Regulations provides that the property revenues include
the actual rental income as well as the economic benefits
obtained from the properties. The current property tax rate
for the leased properties is 16% on the rental income. Properties
not leased are taxed at the rate of 10% on taxable revenues
deemed by the government based on the estimated value of the
properties. The estimated value of properties will be periodically
revised by the authorities, taking into account all relevant
factors and circumstances from time to time in determining
the value of properties. Taxpayers subject to property tax
are required to remit their tax payments to the authority
generally between June and August each year. A deduction of
up to 10% on the taxable revenue of properties of both categories
is available to taxpayers to cover repairs and maintenance
and other related expenses, provided that such expenses are
borne by the taxpayers. For purpose of claiming the deduction,
taxpayers must file a
prescribed declaration form with details of expenditure items to the Macao Finance Services Bureau in January each year .
With respect
to the tax exemptions and relief, the Regulations allow some
real properties owned by certain organisations to be exempted
from property tax levy, for example, real properties of government
departments, religious organisations, and non profit-making
educational institutes, etc. Taxpayers of the newly constructed
properties, commercial or residential, are entitled under
the Article 9 an exemption from property tax during the initial
period; 4 years for properties in Macao city and 6 years for
properties on outlying islands. This exemption also applies
to those renovated or expanded properties. To qualify for
the exemption, the reconstruction costs of such properties
should be more than 50% of their market values. Exemptions
are also available to the industrial properties, where the
properties in Macau city are exempted from property tax for
the initial 5 years and the properties on outlying islands
are exempted for the initial 10 years. According to the relevant
tax incentives offered by Macao government to the industrial
sector, certain industrial organisations with newly constructed
or expanded real properties may apply for exemption from property
tax for a period of up to 10 years for properties in Macao
city, and a period of up to 20 years for properties on outlying
islands. Also, some other tax incentives are available to
certain approved corporations and organisations carrying on
business in tourism industry. These taxpayers may apply for
exemption from property tax for a given period prescribed
by the authorities.
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