Tax measures proposed in 2025-26 Budget

In today's (February 26) Budget, the Financial Secretary introduced the following tax measures:

1. One-off Tax Reduction: A one-time reduction of 100% on profits tax, salaries tax, and tax under personal assessment for the year of assessment 2024/25, subject to a cap of $1,500 per case. This measure targets 2.14 million taxpayers subject to salaries tax and tax under personal assessment, as well as 165,400 businesses. The government revenue will decrease by $3.1 billion. Taxpayers must submit their profits tax returns and individual tax returns as usual, and the Inland Revenue Department will implement the reduction in the final assessment. The tax reduction applies to the final tax for the year of assessment 2024/25 but not to the provisional tax for the same year. The provisional tax paid must be settled on time, with any excess refunded. The property tax is not eligible for this reduction, but individuals with rental income may enjoy it under personal assessment. Taxpayers can also choose personal assessment for business profits or rental income for the year of assessment 2024/25, with the reduction calculated based on the tax payable under personal assessment. The exact amount will vary depending on individual circumstances.

2. Stamp Duty Threshold Increase: The maximum value of properties subject to stamp duty is raised from $3 million to $4 million. This change applies to any conveyance executed on or after February 26, 2025. The Government has introduced the Stamp Duty (Amendment) Bill 2025 to legislate this measure. To benefit buyers immediately, the Public Revenue Protection (Stamp Duty) Order 2025 has been issued under the Public Revenue Protection Ordinance.

Further details and tax calculation examples are available on the Inland Revenue Department's website (www.ird.gov.hk) and can be obtained through the hotline 2598 6001.