Residential units for sale before TOP
For a single-use residential development built for sale, ABSD and interest payable on ABSD incurred before the Temporary Occupation Permit (TOP) is issued form part of development cost. The part attributed to units sold becomes deductible in or after the TOP Year of Assessment when the related profits are taxed. The table concerns duty and related interest treatment, not the ABSD rate or conditions for remission.
Residential units for sale after TOP
For amounts incurred after TOP, allocate ABSD and its interest between sold and unsold units by gross floor area. The part for sold units is deductible in the year incurred; the part for unsold units is deducted as those units are sold. These two timing rules depend on the unit’s sale status and should not be merged into a single immediate deduction for the whole development.
Mixed-use developments: allocate by land use first
The mixed-use row, such as residential and non-residential development, is expressly limited to land zoned residential/institution or white sites where ABSD applies to 100% of the land or building value. Allocate duty and interest to each land use using actual land cost or a professional valuation where appropriate. This first allocation uses a different basis from the subsequent gross-floor-area allocation between sold and unsold sale units.
Investment-held units and sale units remain distinct
For mixed-use units developed for investment holding, capitalise the allocated ABSD and interest into development cost both before and after TOP; the amounts are not deductible against rental income. Units developed for sale before TOP follow the capitalisation and profit-taxation timing for residential sale developments. After TOP, sale units follow the sold/unsold gross-floor-area allocation and deduction timing described above.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗