Hong Kong’s finance chief Paul Chan has announced reductions in both salary and profits tax cuts in his latest budget speech.
In the coming fiscal year, salaries tax, as well as tax under personal assessment, will still be reduced by 100 per cent, but the cap will be halved to HK$1,500, Chan said during his annual budget speech at the Legislative Council on Wednesday.
Profits tax will also be reduced by 100 per cent and capped at HK$1,500.
In both cases, it means a tax reduction capped at HK$1,500. Those set to pay under that amount will not pay anything, whilst those set to pay over HK$1,500 in tax must still pay the remainder.
Reductions in both salaries and profits taxes were subject to a ceiling of HK$3,000 in the 2024-25 fiscal year.
The new tax measures will benefit more than 2.1 million taxpayers and 165,000 businesses, but will reduce government revenue by HK$3.1 million, the finance chief said.
Chan estimated that Hong Kong would log a deficit of HK$87.2 billion in 2024-25, marking the third consecutive financial year in the red.
Property taxes
Meanwhile, rates concessions for both domestic and non-domestic properties in the first quarter of 2025-26 are subject to a ceiling of HK$500, down from HK$1,000 last year.
But the financial secretary also delivered a dose of good news for people buying property.
“To ease the burden on buyers of residential and non‑residential properties at lower values, I announce that the maximum value of properties chargeable to a stamp duty of HK$100 will be raised from HK$3 million to HK$4 million with immediate effect,” he said.
The move, expected to benefit about 15 per cent of property transactions, will cut government revenue by about HK$400 million per annum.
The government will offer the city’s underprivileged residents an allowance equal to half a month of the standard rate of the Comprehensive Social Security Assistance (CSSA) scheme, the same arrangement as last year.
- HK logs estimated HK$87.2bn deficit, 7% spending cuts over coming 3 years.
- Democratic Party urges pay cut for senior officials
- Gov’t defends plan to axe HK$2,500 student subsidy
- Measures do not address poverty, Hong Kong NGO says
- Public transport subsidy cut back as threshold upped to HK$500.
- Hong Kong to halt commercial land sales on hold amid high vacancy rates.
- HK$1.2 billion earmarked to boost tourism.
- HK$1 billion set aside to set up AI research institute.
- Hong Kong taxpayers will see lower tax reduction in 2025-6.
- Pay freeze for gov’t employees, inc. civil servants, judges, and chief exec.
- Fines for traffic offences, parking meter fees to rise.
- Use of HK$2 transport scheme for elderly capped to 240 trips per month.
- Hong Kong airport tax to rise from HK$120 to HK$200.
- Hong Kong considers legalisation of basketball gambling.
- Activists call off traditional demo at gov’t HQ citing ‘immense pressure’.
Stay tuned to HKFP for full, trusted coverage of the 2025 budget.
The measure will cost the government around HK$3.1 billion, Chan said.
