Prepare the property tax assessments

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Reference no: EM133542097

Question: Jacky purchased a flat on 1 July 2017 and the flat was let to Peter for a two-year lease on the same day. Peter paid to Jacky a premium of $300,000 on 1 July 2017 and a monthly rent of $30,000 which was payable on the first day of each month. Jacky paid rates of $1,500 per quarter.

Peter paid the rent on time each month. However, he did not pay the rent for the three months of February, March and April 2019, and moved out of the flat on 30 April 2019 with the rent still outstanding. Jacky took possession of the flat and let it to Donald at a monthly rent of $45,000 from 1 June 2019. Jacky paid rates of $1,500 per quarter.

Prepare the Property Tax assessments (show all steps line by line) for Jacky for the years of assessment 2017/2018, 2018/2019 and 2019/2020. The standard rate for all the years of assessment was 15%. Assume that the rates should be deductible under Property Tax computation only when the property is leased. Show workings in your calculations.

Reference no: EM133542097

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