Hong Kong Budget 2026-27

On 25 February 2026, the Financial Secretary of the Hong Kong SAR Government unveiled the 2026-27 Budget (the “Budget”) under the theme “Driving High-quality, Inclusive Growth with Innovation and Finance”.

Presented against a backdrop of improving fiscal performance, this year’s Budget sets the policy direction for Hong Kong’s tax and economic landscape, with direct implications for businesses, investors and individuals operating in and from the city.

Hong Kong’s overall economy grew by 3.5% in 2025, marking the third consecutive year of expansion. Total exports of goods increased by 12%, while service exports rose by 6.3%. The labour market also showed steady improvement in the second half of the year, with the seasonally adjusted unemployment rate standing at 3.8% in the fourth quarter, and underlying inflation remained at 1.1% in 2025.

Looking ahead, the 2026–27 fiscal outlook projects a surplus of HK$22.1 billion, with reserves forecast to rise further to HK$679.3 billion. The Budget underscores Hong Kong’s continued ambition to reinforce its position as an international financial and trading hub, with particular emphasis on tax competitiveness and targeted sectoral incentives.

Budget Highlights

Supporting Business, Emerging & New Industries

These measures focus on strengthening Hong Kong’s innovation ecosystem, export resilience and high value-added industries through targeted funding and policy support.

• Inject HK$200 million into the Branding, Upgrading and Domestic Sales (BUD) Fund; raise funding ceiling for each “Easy BUD” application to HK$150,000; and provide more targeted funding support for enterprises in AI application
• Introduce a pilot scheme by The Hong Kong Export Credit Insurance Corporation to provide protection for SMEs engaging in exports with higher-risk buyers
• Allocate HK$28 million for the Hong Kong Technology and Innovation Support Centre to provide patent evaluation and implement a 2-year Pilot Patent Valuation Support Scheme to assist I&T enterprises for conducting valuation of their patent assets
• Allocate around HK$220 million to establish the first national manufacturing innovation centre outside the Mainland

Develop Northern Metropolis (NM)

Significant capital allocations aim to accelerate infrastructure, technology and university development within the Northern Metropolis as a long-term economic growth engine.

• Develop Hetao Co-operation Zone Hong Kong Park by allocating HK$10 billion to accelerate land development, provide infrastructure, establish venture fund, etc
• Establish dedicated company and inject HK$10 billion as initial capital to develop San Tin Technopole
• Allocate HK$10 billion to support initial operation of Hung Shui Kiu Industry Park Company Limited

Caring for the Community and Talent Development

The Budget provides targeted funding to support education infrastructure and youth development initiatives to enhance Hong Kong’s talent pipeline.

• Allocate HK$10 billion loan to support campus development in The Northern Metropolis University Town
• Allocate HK$60 million for implementing the HYAB Funding Scheme for International Youth Exchange

Key Tax Measures

The Financial Secretary expressed in the Budget to maintain the competitiveness of Hong Kong’s simple and low tax regime. There are no proposed changes to the salaries tax, profits tax and property tax rates. The key tax measures proposed in the Budget include:

Profits Tax (corporations and unincorporated businesses)

New tax regime: introduce the following new measures:

• Introduce preferential tax rates of half-rate or 5% among other policy measures to attract enterprises and investment (legislative bill expected in 2026)
• Implement the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework and the amended Common Reporting Standard to enhance tax transparency and combat cross-border tax evasion (legislative bill expected in the first half of 2026)
• Explore tax concessions for eligible institutions conducting gold trading and settlement in Hong Kong following the signing of a co-operation agreement with the Shanghai Gold Exchange earlier this year and the establishment of a Hong Kong’s central clearing system for gold
  

• Enhance family offices and fund tax regime, including expanding the scope of “fund” to cover specific funds-of-one, as well as classifying digital assets, precious metals, specified commodities, etc. as qualifying investments eligible for tax concessions (legislative bill expected in the first half of 2026, with a view to effecting the implementation from the year of assessment 2025-26)
• Refine the intellectual property (IP) associated tax regime and institutional framework, including consulting the trade on tax deduction arrangements for capital expenditure in purchasing IP or the rights to use IP (legislative bill expected in 2026)
• Enhance tax concession measures for maritime service industry, provide half-rate tax concession to eligible commodities traders with a view to promoting high value-added maritime services in Hong Kong (legislative bill expected in the first half of 2026)
• Enhance tax incentives and flexibility for Corporate Treasury Centres while introducing a pre-approval mechanism (details expected in mid-2026)
• Continue to expand the network of Comprehensive Avoidance of Double Taxation Agreements (so far signed a total of 55)

Profits tax relief: Reduce profits tax for the year of assessment 2025-26 by 100%, subject to a ceiling of HK$3,000.

Salaries Tax (individuals)

• Salaries tax/tax under personal assessment relief: reduce salaries tax and tax under personal assessment for the year of assessment 2025-26 by 100%, subject to a ceiling of HK$3,000.
• Personal allowances: Increase basic allowance, married person’s allowance, single parent allowance, child allowance and additional child allowance, dependent parent/grandparent allowances
• Deductions: Increase deduction ceiling for elderly residential care expenses

Rates (property owners)

• Provide rates concession for domestic and non-domestic properties for the first two quarters of 2026-27, subject to a HK$500 ceiling per quarter

Stamp duty

• Increase stamp duty on residential properties valued above HK$100 million from 4.25% to 6.5% with effect from 26 February 2026
• Waive stamp duty for transferring non-residential properties into real estate investment trusts seeking to list in Hong Kong (legislative bill planned for first half of 2027)
• Expand the scope of eligible associated body corporates for stamp duty relief in relation to the intra-group transfer of assets, taking effect retrospectively to instruments signed from 25 February 2026 (legislative bill expected in 2026)

Overall, the 2026–27 Budget reinforces Hong Kong’s positioning as a leading international financial centre while expanding targeted incentives in innovation, family office, digital asset and treasury-related sectors.

At the same time, certain measures — particularly in reporting standards and stamp duty — reflect continued alignment with international tax transparency frameworks and evolving market practices.

Fidinam can help

The 2026–27 Budget introduces a range of measures that may affect corporate structures, investment strategies, tax planning and personal financial arrangements.

Whether you are reviewing your company’s tax position, assessing eligibility for new concessions, or evaluating the impact of changes to stamp duty and personal allowances, our team can assist.

We support both companies and individuals in analysing how these proposals apply to their specific circumstances and in implementing practical, compliant solutions aligned with their long-term objectives.

Contact us via the form below.