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Property Tax
Where the
landlord dies,
his executor will be liable to pay property tax for the rental income up to the
date of probate or letters of administration. Thereafter, the beneficial owner will be liable to pay the tax.
The landlord
may reduce his tax liability by election for
Personal
Assessment which brings all his income including property income,
salaries income and business income into a single assessment with
deductions for married person allowance, child allowance, dependent
parent allowance, etc. from the chargeable income. Besides, he can claim
mortgage interest on loans for purchase of the property under Personal
Assessment --- such interest is not deductible under Property Tax.
If the landlord has
property income only, it is always advisable for him to elect for
Personal
Assessment. If he has other incomes, he can also make the
election in the tax return because such election will not
take effect if it is not to his advantage.
Where the
landlord is a limited company, the rental income will normally be included in the
company's assessable profits. If the company pays interest on a loan for
buying the property, the interest is a deductible expense under Profits Tax. |
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