On 25 February 2026, Hong Kong’s Financial Secretary delivered the 2026–27 Budget. The Budget outlines the city’s economic outlook, public finances, and a range of tax measures affecting both businesses and individuals.
The theme of this year’s Budget is:
“Driving High-quality, Inclusive Growth with Innovation and Finance.”
Below is a clear summary of the most important developments.
Hong Kong Economic Outlook for 2026
In 2025, Hong Kong’s economy grew by approximately 3.5%, supported by a strong capital market and improved overall economic conditions. Tax revenues increased and public finances strengthened faster than expected, with the Operating Account returning to surplus.
For 2026, despite global uncertainties, exports and domestic demand are expected to remain resilient. Economic growth is forecast at 2.5% to 3.5%.
Key Tax Measures for Businesses
Profits Tax Reduction (2025/26)
- 100% profits tax reduction
- Capped at HKD 3,000 per case
Rates Concession for Non-Domestic Properties
- Applies to the first two quarters of 2026/27
- Capped at HKD 500 per rateable property
Stamp Duty Changes
Increase for High-Value Residential Properties
- Properties valued above HKD 100 million
- Stamp duty increased from 4.25% to 6.5%
- Applies to instruments executed on or after 26 February 2026
Enhanced Intra-Group Stamp Duty Relief
Proposed changes include:
- Expanding eligibility to bodies corporate without share capital (e.g. certain LLPs)
- Reducing the ownership threshold from 90% to 75%
These enhancements apply to relevant instruments executed on or after 25 February 2026.
Stamp Duty Waiver for REIT Listings
Stamp duty may be waived for the transfer of non-residential properties into real estate investment trusts (REITs) seeking listing in Hong Kong, subject to specified conditions.
Key Tax Measures for Individuals
Salaries Tax Reduction (2025/26)
- 100% reduction
- Capped at HKD 3,000 per case
Increase in Personal Allowances (From 2026/27)
The following tax allowances will increase:
- Basic and single parent allowance:
HKD 132,000 → HKD 145,000 - Married person allowance:
HKD 264,000 → HKD 290,000 - Child and additional child allowance:
HKD 130,000 → HKD 140,000 - Dependent parent/grandparent allowance:
- HKD 25,000 → HKD 27,500 (aged 55–59)
- HKD 50,000 → HKD 55,000 (aged 60 or above)
Additional Child Allowance – Extended Claim Period
From 2026/27 onwards, taxpayers may claim the additional child allowance twice (instead of once) during the first two years following childbirth.
Elderly Residential Care Deduction
The deduction ceiling increases from HKD 100,000 to HKD 110,000 starting from 2026/27.
Rates Concession for Domestic Properties
- Applies to the first two quarters of 2026/27
- Capped at HKD 500 per rateable property
Other Important Tax Developments
R&D Tax Deduction Review
The Government will review and enhance tax arrangements for research and development expenditure to promote innovation and cross-boundary collaboration.
Tax Deduction for Intellectual Property Acquisition
Consultation is underway regarding tax deductions for capital expenditure incurred in acquiring intellectual property (IP) or rights to use IP. An amendment bill is planned for introduction this year.
Enhanced Tax Regime for Family Offices and Funds
To attract more family offices and funds:
- The definition of “fund” will be expanded (including certain funds-of-one)
- Digital assets, precious metals and specified commodities will qualify as eligible investments
An amendment bill is expected in the first half of 2026, with intended implementation from 2025/26.
Corporate Treasury Centres (CTCs)
Additional tax incentives and flexibility will be introduced to strengthen Hong Kong as a base for CTCs. A pre-approval mechanism will also be introduced.
International Gold Trading Incentives
Following cooperation with the Shanghai Gold Exchange and the establishment of a central gold clearing system, the Government will explore tax incentives for eligible institutions conducting gold trading and settlement in Hong Kong.
Maritime Services Tax Concessions
An amendment bill will enhance maritime tax concessions, including a half-rate tax concession for eligible commodities traders.
Crypto-Asset Reporting Framework
The Inland Revenue Ordinance will be amended to implement:
- The Crypto-Asset Reporting Framework
- The updated OECD Common Reporting Standard
These measures aim to enhance international tax transparency and combat cross-border tax evasion.
Advisory Committee on Tax Policy
An Advisory Committee on Tax Policy will be established and chaired by the Financial Secretary to gather views from business and professional sectors and ensure Hong Kong’s tax policies continue to support economic growth.
What Does the 2026–27 Budget Mean for You?
The 2026–27 Hong Kong Budget introduces targeted relief measures, increased allowances for individuals, and strategic tax enhancements aimed at strengthening Hong Kong’s competitiveness.
If you would like to understand how these changes affect your business structure, property transactions, tax planning, or personal tax position, the team at HKWJ would be pleased to assist.
