On 25 February 2026, the Financial Secretary of Hong Kong SAR, Mr. Paul Chan, announced the Hong Kong 2026-27 Budget (the “Budget”). With the booming economy and capital markets, Hong Kong’s economy recorded a growth of 3.5 percent in 2025. In the midst of global and local economic changes, the Budget suggests maintaining economic growth driven by AI and other new technologies. Several individual tax measures have been proposed to alleviate the economic burden of taxpayers.
To alleviate the financial burden of the taxpayers, the Budget proposed a 8% to 10% increase in various Personal Allowances and Deductions under Salaries Tax from the year of assessment 2026-27 onwards, and a one-off 100% tax waiver up to a ceiling of HK$3,000 to salaries tax and tax under personal assessment for year of assessment 2025-26.
| Current Fiscal year (HK$) | Proposed (HK$) | |
| Various Personal Allowances | ||
| Basic Allowance | $132,000 | $145,000 |
| Married Person’s Allowance | $264,000 | $290,000 |
| Child Allowances – 1st to 9th child (each):
o First two years after childbirth* o Other years | $260,000
$130,000 | $280,000
$140,000 |
| Dependent Parent/Grandparent Allowance:
o Aged 55-59 o Aged 60 or above |
$25,000 $50,000 |
$27,500 $55,000 |
| Additional Dependent Parent/Grandparent Allowance – for residing continuously with taxpayer
o Aged 55-59 o Aged 60 or above |
$25,000 $50,000 |
$27,500 $55,000 |
| Single Parent Allowance | $132,000 | $145,000
|
| Deduction Ceiling | ||
| Elderly Residential Care Expense | $100,000 | $110,000 |
* announced in the 2025 Policy Address and subject to passage of relevant legislation
| Other measures | Development |
| “Full Portability” of Mandatory Provident Fund (“MPF”) | The Budget proposed all employees may choose to transfer MPF benefits derived from employer mandatory contributions from a Contribution Account in an MPF scheme participated by the employer to a Personal Account in an MPF scheme of their own choice. The flexibility in investing funds for retirement could appeal overseas talents from moving to Hong Kong. |
| Comprehensive double taxation agreement | Hong Kong has signed a total of 55 Comprehensive Avoidance of Double Taxation Agreements so far including Jordan, Maldives, Norway and Rwanda which were signed last year. The Government is keen to further expand our treaty network. Such effort could help mitigating double taxation for mobile employees from Hong Kong. |
Overall, the 2026-27 Budget reaffirms Hong Kong’s commitment to maintaining a simple tax system. We welcome the proposed adjustments to the personal allowances as the basic allowance and married person’s allowance thresholds have remained unchanged since 2016-17. These fiscal updates integrated with the Budget’s broader strategic investments in technology and innovation could reinforce Hong Kong’s position as a premier, global talent hub. By aligning fiscal policy with the needs of a high-calibre workforce, the Government has reinforced the jurisdiction’s value proposition as a resilient and attractive destination for international professionals and global enterprise alike.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
James Clemence
Asia Pacific CEO
Bruce Lee
Hong Kong SAR Territory Leader
Adam Chiu
Partner
Steven Lim
Partner
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