MAJOR MEASURES PROPOSED IN 2025-26 BUDGET

In his Budget delivered on 26 February 2025, the Financial Secretary of HKSAR proposed the following major measures:

1. Innovation and Technology

AI subsidy scheme by HKSAR.

The Hong Kong Monetary Authority (HKMA) and Cyberport launched a new Generative Artificial Intelligence Sandbox to foster innovation in the banking industry and unleash the potential of AI.

Establishment of a dedicated “Technology Enterprises Channel” (TECH) by HKEX to facilitate the relevant companies in preparing for listing applications.

Intellectual property (IP) is an important foundation for the development of emerging industries.  In addition to obtaining IP rights through local research and development, enterprises will also purchase related rights to use IP.  HKSAR will review the relevant tax deduction arrangements for various expenditures, including the lump sum licensing fees for acquiring the rights to use IP, and related expenses incurred on purchase of IP or the rights to use IP from associates.

Develop Low-altitude Economy and Life and Health Technology.

2. Northern Metropolis

Innovative and Diversified Land Development Approach

HKSAR will adopt a more diversified development approach with an innovative mindset, including piloting “large-scale land disposal”

Earmarked HK $3.7 billion to expedite the provision of infrastructure and public facilities of Phase 1 development of the Hong Kong Park of the Hetao Co-operation Zone. Upon completion of the whole Hong Kong Park, its annual contribution to Hong Kong’s economy is expected to reach HK $52 billion, and about 52, 000 job opportunities will be created.

Railway development

The construction works of Phase 1 of the Northern Link (NOL), i.e. Kwun Tung Station, have commenced for target completion in 2027. Advance works for Phase 2 have also commenced to tie in with the target completion of NOL Main Line in 2034.

3. Reducing profits tax, salaries tax and tax under personal assessment for the year of assessment 2024/25

One-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2024/25 by 100%, subject to a ceiling of HK$1,500 per case. The proposed tax reduction is not applicable to property tax. Individuals with rental income, if eligible for personal assessment, may be able to enjoy such reduction under personal assessment.

4. Provide rates concession for 2025/26

Offer rates concession for the first quarter of 2025/26. The concession ceiling is HK$500.

5. Education and Talent

Launch a new round of Research Matching Grant Scheme of HK$1.5billion; offer 4,000 short-term internship in policy bureaus, departments and public organizations.

6. Pay extra half month of allowances

Offer to pay extra half month allowance of standard CSSA payment, Old Age Allowance, Old Age Living Allowance or Disability Allowance. Similar arrangements will apply to Working Family Allowance.

7. Domestic and non-domestic property transactions

The maximum value of properties chargeable to a stamp duty of HK$100 is increased to HK$4,000,000.

For details, please refer to the following official link: https://www.budget.gov.hk/2025/eng/speech.html

Should you have any questions on these, please do not hesitate to contact us.