RSS 
Share
Printer View 
PRESS RELEASE
(Source : Information Services Department)
Tax measures proposed in 2026-27 Budget
*************************************************
In the Budget delivered today (February 25), the Financial Secretary proposed the following tax measures:
(1) Providing a one-off tax reduction for the year of assessment 2025/26
A one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2025/26 by 100%, subject to a ceiling of $3,000 per case, will be provided. This measure will benefit about 2.12 million taxpayers liable to salaries tax and tax under personal assessment and about 171 000 businesses. The Government tax revenue will be reduced by about $5.8 billion.
The measure will reduce the amount of tax payable by taxpayers for the year of assessment 2025/26. Taxpayers only need to file their profits tax returns and tax returns for individuals for the year of assessment 2025/26 as usual. Upon enactment of the relevant legislation, the Inland Revenue Department will effect the reduction in the final assessment. The reduction will only be applicable to the final tax for the year of assessment 2025/26, but not to the provisional tax of the same year. Taxpayers should pay the provisional tax on time as stipulated in the demand notes that have been issued to them. The provisional tax paid will be applied in payment of the final tax for the year of assessment 2025/26 and the provisional tax for the year of assessment 2026/27. The excess balance, if any, will be refunded.
The reduction is not applicable to property tax. Nevertheless, eligible individuals with rental income may enjoy such a reduction under personal assessment.
A taxpayer who is separately chargeable to salaries tax and profits tax can enjoy tax reduction under both tax types. A taxpayer having business profits or rental income may elect for personal assessment in their tax returns for individuals for the year of assessment 2025/26. The reduction will then be calculated based on the tax payable under personal assessment, amount of which may be different from the amount of tax reduction a taxpayer would have got had he / she not elected for personal assessment. The actual amount will be assessed case by case.
(2) Increasing allowances and deduction ceiling for elderly residential care expenses
The Budget proposed to increase the basic allowance, married person's allowance, single parent allowance, child allowance, additional child allowance for newborns, dependent parent/grandparent allowance and additional allowance, and raise the deduction ceiling for elderly residential care expenses starting from the year of assessment 2026/27.
Besides, the 2025 Policy Address proposed to extend the claim period of additional child allowance for newborns from one year to two years. This measure and the above Budget proposals will be effective starting from the year of assessment 2026/27.
(3) Increasing the ad valorem stamp-duty rates for residential property transactions valued above $100 million
The ad valorem stamp-duty rates on residential properties valued above $100 million will be raised from 4.25% to 6.5%. The new rates apply to instruments executed on or after February 26, 2026 for the sale and purchase or transfer of residential properties.
Before the proposal is passed by the Legislative Council, the Inland Revenue Department will continue to charge stamp duty at the prevailing rate of 4.25% for residential property transactions concerned. Once the bill is passed by the Legislative Council and the amendment ordinance comes into effect upon gazettal, the purchasers or vendors concerned have to pay the difference of the stamp duty within 30 days.
(4) Relaxing the criteria for stamp duty relief in respect of intra-group transfer of assets
The criteria for stamp duty relief in respect of intra-group transfer of assets under section 45 of the Stamp Duty Ordinance (Cap. 117) will be relaxed to expand the scope of eligible associated body corporates. The proposal applies to instruments for sale and purchase or transfer of assets executed on or after February 25, 2026.
The measures above will be effected after the relevant ordinances have been amended. Details of the measures and examples of tax calculations are available on the website of the Inland Revenue Department and can be obtained through the fax hotline 2598 6001.
(1) Providing a one-off tax reduction for the year of assessment 2025/26
A one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2025/26 by 100%, subject to a ceiling of $3,000 per case, will be provided. This measure will benefit about 2.12 million taxpayers liable to salaries tax and tax under personal assessment and about 171 000 businesses. The Government tax revenue will be reduced by about $5.8 billion.
The measure will reduce the amount of tax payable by taxpayers for the year of assessment 2025/26. Taxpayers only need to file their profits tax returns and tax returns for individuals for the year of assessment 2025/26 as usual. Upon enactment of the relevant legislation, the Inland Revenue Department will effect the reduction in the final assessment. The reduction will only be applicable to the final tax for the year of assessment 2025/26, but not to the provisional tax of the same year. Taxpayers should pay the provisional tax on time as stipulated in the demand notes that have been issued to them. The provisional tax paid will be applied in payment of the final tax for the year of assessment 2025/26 and the provisional tax for the year of assessment 2026/27. The excess balance, if any, will be refunded.
The reduction is not applicable to property tax. Nevertheless, eligible individuals with rental income may enjoy such a reduction under personal assessment.
A taxpayer who is separately chargeable to salaries tax and profits tax can enjoy tax reduction under both tax types. A taxpayer having business profits or rental income may elect for personal assessment in their tax returns for individuals for the year of assessment 2025/26. The reduction will then be calculated based on the tax payable under personal assessment, amount of which may be different from the amount of tax reduction a taxpayer would have got had he / she not elected for personal assessment. The actual amount will be assessed case by case.
(2) Increasing allowances and deduction ceiling for elderly residential care expenses
The Budget proposed to increase the basic allowance, married person's allowance, single parent allowance, child allowance, additional child allowance for newborns, dependent parent/grandparent allowance and additional allowance, and raise the deduction ceiling for elderly residential care expenses starting from the year of assessment 2026/27.
Besides, the 2025 Policy Address proposed to extend the claim period of additional child allowance for newborns from one year to two years. This measure and the above Budget proposals will be effective starting from the year of assessment 2026/27.
(3) Increasing the ad valorem stamp-duty rates for residential property transactions valued above $100 million
The ad valorem stamp-duty rates on residential properties valued above $100 million will be raised from 4.25% to 6.5%. The new rates apply to instruments executed on or after February 26, 2026 for the sale and purchase or transfer of residential properties.
Before the proposal is passed by the Legislative Council, the Inland Revenue Department will continue to charge stamp duty at the prevailing rate of 4.25% for residential property transactions concerned. Once the bill is passed by the Legislative Council and the amendment ordinance comes into effect upon gazettal, the purchasers or vendors concerned have to pay the difference of the stamp duty within 30 days.
(4) Relaxing the criteria for stamp duty relief in respect of intra-group transfer of assets
The criteria for stamp duty relief in respect of intra-group transfer of assets under section 45 of the Stamp Duty Ordinance (Cap. 117) will be relaxed to expand the scope of eligible associated body corporates. The proposal applies to instruments for sale and purchase or transfer of assets executed on or after February 25, 2026.
The measures above will be effected after the relevant ordinances have been amended. Details of the measures and examples of tax calculations are available on the website of the Inland Revenue Department and can be obtained through the fax hotline 2598 6001.
Ends/Wednesday, February 25, 2026
Issued at HKT 23:11
Issued at HKT 23:11
NNNN