Licensing & tax guide

Short-term rental licensing & tax in Hong Kong

Any paid stay of under 28 consecutive days makes a home a hotel or guesthouse under the Hotel and Guesthouse Accommodation Ordinance, and it needs a license from the Office of the Licensing Authority before opening. Owners and tenants of unlicensed premises can be prosecuted, so for an ordinary flat the legal route is a furnished let of 28 days or more.

At a glance

Licensing steps

1. Under the Hotel and Guesthouse Accommodation Ordinance (Cap. 349), premises offering paid sleeping accommodation for less than 28 consecutive days are a hotel or guesthouse and must be licensed before they operate.
2. Lettings fall outside the Ordinance only if every letting is for at least 28 continuous days and no waiver, refund or fee reduction is given if a stay is cut short.
3. License applicants must provide written legal advice on whether the deed of mutual covenant (DMC) or government lease restricts hotel or guesthouse use. The Office of the Licensing Authority (OLA) also considers building and fire safety, local residents' views and whether the applicant is fit and proper, and the license holder must personally supervise the premises.
4. Since the 2020 amendments, owners and tenants of unlicensed premises can be charged too. The maximum penalty is HK$500,000 and 3 years' imprisonment, plus HK$20,000 a day for continuing offenses. A second conviction within 16 months can lead to a 6-month closure order.

Tax notes

• Owners who let property in Hong Kong must report the rental income for Property Tax.
• Hotel Accommodation Tax resumed at 3% of accommodation charges on 1 Jan 2025. Hotels and guesthouses with fewer than 10 rooms normally available for guests are exempt, as are stays of 28 consecutive nights or more.

Cities in Hong Kong

Sources