Hong Kong: Tax proposals in 2026-2027 budget
Proposals related to profits tax, salaries tax, property tax, stamp duty, and hotel accommodation tax
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February 26, 2026
The Financial Secretary on February 25, 2026, delivered the 2026-2027 budget. While the budget does not propose any changes to profits tax rates for 2026-2027, it does include proposals related to profits tax, salaries tax, and other taxes such as property tax, stamp duty, and hotel accommodation tax.
Profits tax
- Standard tax rate for corporations remains at 16.5%, and for unincorporated businesses at 15%
- Two-tiered profits tax rates regime continues, allowing qualifying corporations to be taxed at 8.25% on the first HKD 2 million of assessable profits and at 16.5% on the remaining balance (7.5% and 15% for qualifying unincorporated businesses)
- Reduction of 100% in profits tax payable for 2025-2026, subject to a ceiling of HKD 3,000
- Tax deduction arrangements for capital expenditure in purchasing intellectual property
- Half-rate tax concession to eligible commodity traders
- Enhance tax concession measures for the maritime services industry
- Expand Hong Kong’s network of comprehensive avoidance of double taxation agreements
- Enhance family offices and fund tax regime
Salaries tax
- Reduction of 100% in salaries tax payable for 2025-2026, subject to a ceiling of HKD 3,000
- The tax charge for salaries tax is the lower of:
- Net assessable income less charitable donations and allowable deductions at the standard rate (15% on the first HKD 5 million of net income and 16% on the remainder), or
- Net assessable income less charitable donations, allowable deductions, and personal allowances charged at progressive rates
Other taxes
- Amend the law to provide stamp duty waiver for transferring non-residential properties into REITs seeking to list
- Adjust stamp duty on residential properties valued over HKD 100 million from 4.25% to 6.5%, with retrospective effect from February 26, 2026
- Expand the scope of eligible associated body corporates for stamp duty relief in relation to the intra-group transfer of assets (for details, read a March 2026 report prepared by the KPMG member firm in Hong Kong)
- Rates waiver for each domestic property for the first two quarters of 2026-2027, subject to a ceiling of HKD 500 for each rateable property
- Rates concession for each non-domestic property for the first two quarters of 2026-2027, subject to a ceiling of HKD 500 per quarter
- No proposed changes to hotel accommodation tax, but increased from 0% to 3% starting January 1, 2025
- Property tax rate remains at 15%
Read a February 2026 report prepared by the KPMG member firm in Hong Kong