2026-27 Budget – Tax Measures

On 25 February 2026, the Financial Secretary introduced a one-off tax reduction of 100% for profits tax, salaries tax, and personal assessment tax for the year of assessment 2025/26, with a cap of $3,000 per case. This reduction does not apply to property tax and taxpayers are advised to proceed with their usual tax return filings.

The proposal also encompasses an increase in various allowances commencing from the year of assessment 2026/27: Basic Allowance, Married Person's Allowance, Single Parent Allowance, Child Allowance, Additional Child Allowance, Dependent Parent/Grandparent Allowance, and Additional Dependent Parent/Grandparent Allowance.

Additional enhancements include adjustments to elderly residential care expenses, raising the deduction limit from $100,000 to $110,000 and extending the period for claiming additional child allowance for newborns from one year to two years. Starting from the year of assessment 2026/27, taxpayers can claim double the allowance for each child within the first two years following childbirth.

The Financial Secretary has proposed increasing the stamp duty rate for residential properties valued above $100 million, from 4.25% to 6.5%. The new rates will apply to instruments executed on or after 26 February 2026 for residential property sales and purchases.

The proposal further relaxes stamp duty relief conditions for intra-group transfers under section 45 of the Stamp Duty Ordinance, expanding the scope of qualifying associated bodies corporate for instruments executed on or after 25 February 2026.

Additionally, the proposal offers a stamp duty waiver for the transfer of non-residential properties into real estate investment trusts, applicable to those seeking to list in Hong Kong provided specified conditions are met.