The 2025-26 Hong Kong Financial Budget Announced on 26 February 2025 (All in HK$)

Economic prospects

• Consolidated budget deficit in 2025-26: -$67.0B (2024-25: deficit -$87.2B).
• GDP growth in 2025-26: 2 ~3% (2024-25: 2.5%).
• Underlying inflation in 2025-26: 1.5% (2024-25: 1.1%).

Tax relief and Support

• Reduce profits tax for 2024-25 by 100%, subject to a $1,500 ceiling.
  
• Reduce salaries tax for 2024-25 by 100%, subject to a $1,500 ceiling.
  
• Rates concession for properties for the first quarter of 2025-26, subject to a $500 ceiling.
  
• Provide an extra half-month allowance of standard CSSA payments, Old Age Allowance, Old Age Living Allowance or Disability Allowance. Similar arrangements will apply to the Working Family Allowance.
  

Other salient items

• Adjust the two transport subsidy schemes to reduce government expenditure by about $6.2B in the next 5 years. The $2 scheme: targeted beneficiaries remain unchanged. Implement the “$2 flat rate cum 80% discount” (for trips with fare above $10, 80% discount); and number of concessionary trips limited to 240 per month.
  
• Public transport fare subsidy scheme: threshold for subsidy collection raised from $400 to $500 starting from June 2025. Subsidy amount to one-third in excess of the threshold will continue to be provided, while the subsidy cap at $400 per month will remain unchanged.
  
• About 13,700 housing units from the 2025/26 Land Sale Programme (8 residential sites), railway property developments, URA projects and private development and redevelopment projects.
  
• No commercial site will be put on sale in the coming year. Make available land for about 80,000 private housing units in the coming 5 years.
  
• Public housing: total public housing supply will reach 190,000 units in the coming 5 years.
  
• Private housing: completion of over 17,000 private residential units annually in the coming 5 years. Expected first-hand private residential unit supply to be about 107,000 units over the next 3-4 years.
  

Increase revenue

• Starting from October 2025, increasing air passage departure tax from $120 to $200. Government revenue to rise by about $1.6B per year.
  
• Under various talent and capital investor admission schemes, with immediate effect, charge an application fee of $600; raise visa fee to $600 or $1,300 based on the duration of limit of stay, thereby increasing revenue by $620M per year.
  
• Review tolls of government tunnels and strategic routes, licence fees for private electric cars, parking meter charges and fixed penalties for traffic offences. Government revenue is estimated to increase by $2B.
  
• Explore boundary facilities fee on private cars departing via land boundary control points (taking a fee of $200 per private car as an example, the measure will bring the revenue of about $1B per year) without affecting tour coaches and goods vehicles.
  
• Implement global minimum tax proposal to address base erosion and profit shifting, i.e. BEPS 2.0, to bring in tax revenue of $15B annually.
  

Bond issuance

• As works are rolled out in the Northern Metropolis, government expenditure on works will reach its peak. Average annual capital works expenditure will grow from about $90B to about $120B over the next 5 years.
  
• Issue bonds worth $150B to $195B each year under the Government Sustainable Bond Programme and the Infrastructure Bond Programme over the next 5 years. About 56% of which is to be used for re-financing short-terms debts.
  
• The ratio of government debt to GDP will be maintained at 12-16.5%, which is still considered a stable and manageable low-debt level, and much lower than that of many advanced economies.
  

  1. Profits tax (no changes)

		Corporate		Unincorporate
Assessable profits First $2M*		8.25%		7.5%
Remainder		16.5%		15%
* For those that enjoys two-tiered rates only.

2. Salaries tax (no changes)

									Present
Salary				First $5M					15%
				Remainder					16%
Progressive rates
First $50,000									2%
Next $50,000									6%
Next $50,000									10%
Next $50,000									14%
Remainder									17%
Allowances									($)
Basic									132,000
Married									264,000
1-9 child									130,000
Child year of birth additional									120,000
Dependent brother or sister									37,500
Dependent parent and grandparent
aged > 60 or disabled									50,000
Dependent parent and grandparent
>55 aged <60									25,000
Additional dependent parent and grandparent aged > 60 or									50,000
disabled and residing with taxpayer
Additional dependent parent and grand parent >55 aged									25,000
<60 and residing with taxpayer
Single parent									132,000
Personal disability									75,000
Dependent disability									75,000
Deduction ceiling:
Self-education									100,000
Elderly residential care									100,000
Home loan interest -basic									100,000
(20 years) -additional reside with your child									20,000
Contributions to recognized retirement schemes									18,000
Voluntary health insurance scheme									8,000
Annuity premiums and MPF voluntary contribution									60,000
Domestic rental expenses -basic									100,000
-additional reside with your child									20,000
Charitable donations (income – expenses - allowances)									35%
Expenses on Assisted Reproductive Services									100,000

 

3. Property tax (no changes)

Property tax

15%

 

4. Rates for domestic tenements (proposed changes)

Annual rateable value $			Present
First 550,000			5%
Next 250,000			8%
Remainder			12%
Government rent (if applicable)			3%

5. Stamp duty (proposed changes) 

Removing all restrictions on property transactions duty.
	Consideration($)					subject to marginal relief
				Proposed		Present
	3M <					$100
	3M to 4M			$100		1.50%
	4M to 4.5M					1.50%
	4.5M to 6M					2.25%
	6M to 9M					3.00%
	9M to 20M					3.75%
	>20M					4.25%

On lease of immovable property in HK (no changes)		Yearly average
Term		rent
Not defined or < 1 year		0.25%
1-3years		0.5%
> 3years		1%
Key money, construction fee etc. mentioned in the lease (if rent is payable)		4.25%

On transfer of stock (no changes)
Value on every sold and bought note (0.2% combined)		0.1%

6. First registration tax (FRT) on private cars (PCs) (no changes)

	Value $
	First 150,000				46%
	Next 150,000				86%
	Next 200,000				115%
	Remainder				132%

The maximum FRT concession for electric PCs, granted under the “One-for-One Replacement” Scheme, will be adjusted to $172,000, whereas the concession ceiling for e-PCs will be lowered to $58,500. For electric commercial vehicles, electric motorcycles and electric motor tricycles the FRT will continue to be waived in full.

7. Duty on tobacco and alcoholic beverages (no changes)

			Present
For each 1,000 cigarettes			$3,306
Cigars			$4,258/kg
Liquor with an alcoholic strength of more than 30% by volume in the bottle not more than 1 litre
First $200 (value)			100%
Remainder			10%

8. Hotel accommodation tax (proposed changes)

			Present
Hotel room rate			3%

1.Innovation and technology

• Set aside $1B to establish the HK Artificial Intelligence Research and Development Institute.
  
• Pilot manufacturing and production line upgrade support scheme: $100M earmarked to provide funding of up to $250,000 on a 1 (government) to 2 (company) matching basis to enterprises.
  

2.Shipping

• Allocate $210M to install the port community system, enhancing the flow and sharing data among stakeholders in the maritime, port and logistics industries.
  

3. Tourism everywhere

• Allocate $1.23B to HK Tourism Board to pursue “tourism is everywhere” concept and implement Development Blueprint for HK’s Tourism Industry 2.0.
  

4. Education and talent

• Launch a new round of Research Matching Grant Scheme, totaling $1.5B, to attract organizations to support research endeavors of institutions.
  
• GBA Youth Employment Scheme: relax the requirements for joining the scheme to include people aged 29 or under with sub-degree or higher qualifications and increase the allowance limit to $12,000 a month.
  

5. Green development

• Launch a $300M subsidy scheme in the middle of the year to encourage the industry to install fast chargers across the city.
  
• Additional funding of $180M to increase the number of residential food waste smart recycling bins or food wastecollection facilities across the city.
  
• Earmark $470M for subsidizing franchised bus operators to purchase 600 electric buses and over $130M for subsidizing the taxi trade to purchase 3,000 electric taxis.
  

6. Small and medium enterprises

• Inject $1.5B into the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) and the Export Marketing and Trade and Industrial Organization Support Fund, and streamline application arrangements.
  
• Funds dedicated to SME financing by participating banks of the Taskforce on SME Lending exceed $390B.
  

7. Northern Metropolis

• Hong Kong Park in Hetao Co-operation Zone: $3.7B earmarked to expedite Phase 1 infrastructure and public facilities; identify suitable land parcels for private development proposals this year.
  

8. Infrastructure development

• Set aside $15M for the Centre of Excellence for Major Project Leaders to enhance professionalism, innovation capabilities and cost-effective management in the construction industry.
  
• Funding about $95M from the Government and CIC to provide on-the-job training subsidies for trainees enrolled in part-time degree programmes.
  
• CIC to allocate $150M to subsidize the construction industry’s on-the-job training for graduates of degree programmes in engineering, architecture, surveying, planning and landscape architecture.
  

9. Caring and inclusive community

• 2025-26: No. of Residential Care Service Vouchers for the Elderly to increase to 6,000. No. of Community Care Service Vouchers for the Elderly to increase to 12,000.
  
• Additional annual provision of over $180M to increase emergency places for residential childcare and strengthen professional support for child-abuse victims and their families.
  
• Additional 1,280-day community rehabilitation and home-care service places for persons with disabilities, involving additional annual expenditure of about $160M.
  
• Regularize the Pilot Project on Enhancing Vocational Rehabilitation Services from third quarter 2025, an annual expenditure of about $100M.
  

10. Strictly containing government expenditure growth

• Pay freezes for all personnel of executive authorities, the legislature, the judiciary and Members of the District Councils in 2025/26.
  
• Stepping up the Productivity Enhancement Programme: a cumulative 7% cut from 2024/25-2027/28. Recurrent government expenditure in 2027/28 to decrease by $27.3B compared to 2023/24. CSSA, Social Security Allowance and statutory expenditure are not affected.
  
• Civil service establishment: reduce by 2% each in 2026/27 and 2027/28. Reduction of about 10,000 posts by April 2027.
  
• Funding for UGC-funded universities: funding of $68.1B in the next 3 years, reflecting an annual reduction target of 2%.
  
• Review district cooling systems in new development areas; estimated savings of at least $40B in works expenditure.