Hong Kong Budget 2026: Tax Cuts, Surplus, and Social Security Boosts Announced
Hong Kong residents and businesses are set to benefit from tax reductions and increased social security payments following the announcement of the 2026 Budget by Financial Secretary Paul Chan on Wednesday, February 25, 2026. The budget also revealed a significant government surplus, ending three consecutive years of fiscal deficits.
Tax Relief Measures
Individuals in Hong Kong will receive a maximum reduction of HK$3,000 in their salaries tax for the 2025-26 assessment year, doubling the previous tax cut. Businesses will also benefit from a profits tax reduction of up to HK$3,000 in the same period. Both concessions represent an increase from the previous fiscal year, where the maximum tax relief was capped at HK$1,500.
Approximately 2.12 million taxpayers and 171,000 businesses are expected to benefit from these tax cuts, according to the finance minister. Hong Kong Free Press reports.
Budget Surplus and Government Finances
The Hong Kong government is projecting a budget surplus of HK$51.3 billion for the current year, marking a turnaround from three years of fiscal deficits. The Standard highlights this positive financial outlook.
Additional Support Measures
In addition to the tax relief, rates concessions for both domestic and non-domestic properties will be capped at HK$500 each for the first two quarters of 2026-27. This will affect around 3.15 million domestic properties and 440,000 non-domestic properties.
Recipients of social security schemes, including the Comprehensive Social Security Assistance and Old Age Allowance, will receive an extra month’s payment, providing further support to vulnerable populations. Info.gov.hk details these measures in the full budget speech.
Key Takeaways
- Maximum HK$3,000 salaries tax reduction for the 2025-26 assessment year.
- Up to HK$3,000 profits tax reduction for businesses in 2025-26.
- HK$51.3 billion budget surplus projected for the current year.
- Rates concessions capped at HK$500 for the first two quarters of 2026-27.
- Extra month’s payment for social security scheme recipients.