# Moving to HK from USA



## FlyFly (Oct 21, 2015)

Hi Everyone,

I'm new to the forum but people seem really responsive so I'm reaching out. I'll be moving to Hong Kong shortly and would like to know where to live. To give a little background I'm in my late twenties and will be traveling there by myself. I won't know anyone in the city/region so I'd like to be someplace social where I can make friends. My monthly salary will be ~90K HKD. How much of this should I spend on rent? I heard there are government taxes on rent, is this true? What is a normal broker fee and is it possible to avoid paying one (apartments by owner)? My relocation is permanent with a very brief stint in sponsored housing so I will need to find a place within a few weeks of arriving. I think ideally I would like to live on the Island itself.

Thanks for your help!


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## Asian Spirit (Mar 1, 2010)

Howdy and welcome to the forum. The HK page is a bit slow at the moment but you should get some helpful replies.
Hope you enjoy the forum and Hong Kong once you get moved..


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## Capstan (Sep 22, 2015)

I assume you will be working in Central, so the default answer is going to be Mid-Levels - you can take the escalator to work, move on to LKF afterwards and then walk (stagger?) home.

As a rule of thumb budget a maximum of a third of your salary pre tax on rent - 30k should get you something decent. 

Info on Agents fees is something you can find via Google, but plan on 2 weeks to 1 month rent - plus 1 to 2 months as a returnable deposit, and the first month rent in advance. 

Is it possible to avoid the agency fee? 
For a local who speaks and reads Cantonese, I'm sure it is. 

For a fresh-of-the boat expat with no local knowledge, contacts or language skills... 

Your employer should be able to put you in touch with an expat oriented rental agent to show you different districts based on your requirements and budget. They may also assist with sorting out your gas, electricity water etc. 

The tax question, could be a couple of things. 

You have register the rental agreement with the government and pay Stamp Duty - that's not a huge amount of money although I forget the details - Google is your friend. Might be wrong, but I believe the landlord should pay it. 

Your copy of the rental agreement should be returned with the relevant stamps attached - another reason to pay for an decent agent as they will take care of it for you. 

The other possibility is that your employer may offer a benefit that reduces the amount of tax you pay on the portion of your income that goes to rent - it's called rental reimbursement, and it makes a significant difference to your tax bill. Worth asking as most major employers will offer it.


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## ATSC (Nov 9, 2015)

Capstan said:


> I assume you will be working in Central, so the default answer is going to be Mid-Levels - you can take the escalator to work, move on to LKF afterwards and then walk (stagger?) home.
> 
> As a rule of thumb budget a maximum of a third of your salary pre tax on rent - 30k should get you something decent.
> 
> ...


I'm not sure if the rental reimbursement is correct. My understanding is that if your employer is providing any benefits to you by providing you a house or housing benefit in terms of money, etc., then these kinds of benefits are considered as taxable income similar to your monthly salary.

If you are having your own properties and in mortgage, you may have some extra allowance before tax. I'm not sure as i'm living with my parents.

I'm quite curious on what kind of occupation will you have, HK$90k/ month before 30 sounds very exceptional here.:juggle:


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## Capstan (Sep 22, 2015)

It's correct, assuming the employer has a properly managed scheme. Both they and the employee need to meet fairly stringent rules though. 

If you Google "rental reimbursement Hong Kong", there is plenty of info including examples provided by the tax authorities to assist with annual filings.


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## ATSC (Nov 9, 2015)

So I think you are referring to rental reimbursement from the Employer instead of a deduction in tax payable. I think it is the same logic elsewhere in the world.

Say if FlyFly has to pay a 30k rent per month, it is a post-tax expense to the employer and not deductible from his Salary Tax.
If the employer is paying the 30k on behalf of FlyFly, the money becomes pre-tax expense and is deductible from the Profit Tax of the Employer.

It's always a balance of calculation that the overall benefits to have the Employer paying the rent is higher, and ultimately FlyFly is enjoying a house of 30k provided by Employer and receiving salary > 60k

right?


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## Freemonti (Nov 10, 2015)

In my view you would like to live close to the social action, which means HKG island, Mid-Levels. Apartment costs are relatively high and depend on size and view. For a small apartments around 900 sqft, you may think around HKD 30-40K. Agent fee will be around 1 month, will be hard to avoid, since they do the paperwork for both you and the landlord. Your lease will be filled to the government. 
Apartments are on the market by different agents, will be best to contact them, once you arrived HKG. 

For furniture options, you may want to visit: sofasale.com.hk

Good luck and have fun. Hong Kong is a great city.


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## Capstan (Sep 22, 2015)

Hi ATSC - I believe you are correct in the mechanism, with possibly one exception. 

You pay the rent (30k) in your example, and the company "reimburses" you from your monthly salary. 

On your tax return you would declare 60k of regular salary (x12 presumably) which will be taxed at the regular rate. You would also declare 12 x 30k of housing as a benefit - which is taxed at a much lower rate. I don't recall how that is calculated, but it represents a significant reduction. 

So far as I am aware there is no impact to the profits tax paid by the employer - but I may be wrong about that. 

Either way, I would hope nobody is making tax decisions based on this thread.


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## ATSC (Nov 9, 2015)

Capstan said:


> Hi ATSC - I believe you are correct in the mechanism, with possibly one exception.
> 
> You pay the rent (30k) in your example, and the company "reimburses" you from your monthly salary.
> 
> ...


So my thinking is in line with you.

The housing benefit is computed as 10% of annual salary (GovHK: How the Provision of a Place of Residence to an Employee is Taxed), i.e. 60k x 12 x 10%= 72k
The total benefit is: (30k+60k) x 12 =1080k
but the taxable amount is: 60k x 12 +72k=792k only

Sorry that there should be no change to employer profit tax as the total money spent on this employee doesn't change i.e. (30k+60k) x 12 =1080k


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## FlyFly (Oct 21, 2015)

ATSC said:


> So I think you are referring to rental reimbursement from the Employer instead of a deduction in tax payable. I think it is the same logic elsewhere in the world.
> 
> Say if FlyFly has to pay a 30k rent per month, it is a post-tax expense to the employer and not deductible from his Salary Tax.
> If the employer is paying the 30k on behalf of FlyFly, the money becomes pre-tax expense and is deductible from the Profit Tax of the Employer.
> ...


Hi ATSC,

Yes I believe it's rental reimbursement to lower my pre tax income. The housing I receive on arrival would be separate from the salary.

Thanks for getting back to me!


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## FlyFly (Oct 21, 2015)

Freemonti said:


> In my view you would like to live close to the social action, which means HKG island, Mid-Levels. Apartment costs are relatively high and depend on size and view. For a small apartments around 900 sqft, you may think around HKD 30-40K. Agent fee will be around 1 month, will be hard to avoid, since they do the paperwork for both you and the landlord. Your lease will be filled to the government.
> Apartments are on the market by different agents, will be best to contact them, once you arrived HKG.
> 
> For furniture options, you may want to visit: sofasale.com.hk
> ...


Hi Freemonti,

900 sqft is actually quite large considering my past apartments (my first was a <500sqft studo. I was thinking more along the line of a 650sqft in Mid Levels/Central/Wan Chai area. What seems reasonable for an apartment that size? Possibly with a gym?

Thanks!


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