2025-26 Budget – Tax Measures

The Financial Secretary has introduced a set of measures in the 2025-26 Budget to enhance the tax landscape.

The first initiative involves reducing profits tax, salaries tax, and personal assessment tax by 100% for the year of assessment 2024/25, subject to a $1,500 ceiling per case. This applies to each business for profits tax and each individual or married couple for salaries tax. Personal assessment taxpayers also benefit, with the ceiling applicable to single individuals or married couples electing separately. Individuals with rental income can receive tax relief if they elect for personal assessment, which requires completing Part 7 of the BIR60 tax return for individuals.

The property tax reduction does not apply, but eligible personal assessment taxpayers with rental income and business profits will receive the benefit based on the tax payable under personal assessment. The tax reduction will be reflected in the final assessment, and taxpayers should file their usual returns. Reassessments will be made for assessments issued before the enactment of the relevant legislation. Provisional tax payments must be made on time, with any excess balance refunded.

The second measure increases the maximum property value chargeable to a stamp duty from $100 to $4 million, effective from 26 February 2025. This will be implemented through the Stamp Duty (Amendment) Bill 2025, which has been granted full force by the Public Revenue Protection (Stamp Duty) Order 2025. The new stamp duty value bands will apply to any property transaction executed on or after 26 February 2025.

Further details and examples of the tax reductions can be found in the answers to FAQs and the Tax Calculator available on GovHK.