12 things to know about Hong Kong’s budget and how it will affect you
No more buyer’s stamp duty for non-permanent residents, stamp duty for second-time purchasers or special stamp duty for residential property sold within two years.
2. Sweeteners reduced or removed
A 100 per cent salaries tax deduction will have a HK$3,000 (US$383) ceiling, half the level of last year. Property owners can only apply for one quarter of rate concessions, up to HK$1,000 for each site, instead of two quarters last year. No electricity subsidy has been announced, while consumption vouchers have been scrapped.
3. More bonds as new revenue source
Debt with HK$120 billion will be issued this year, of which HK$70 billion will be a retail tranche that includes HK$50 billion of Silver Bonds and HK$20 billion in green and infrastructure bonds. Between HK$95 billion and HK$135 billion in bonds will be earmarked annually to drive the development of the Northern Metropolis and other projects.
4. Higher salaries tax for top earners
The first HK$5 million of net income will still be subject to standard 15 per cent rate, but the portion exceeding HK$5 million will be charged 16 per cent.
5. Tobacco tax increased for second consecutive year
The rate has been increased to 80 HK cents per stick with immediate effect, bringing the cost of each pack of 20 to about HK$94.
6. Progressive rating system changes to be proposed
Flats with rateable value of more than HK$550,000 will be affected, or about 1.9 per cent of relevant properties.
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7. Hotel tax revived
Charge of 3 per cent charge will be levied on all accommodation fees paid by guests from January 2025, after waiver imposed since July 2008.
8. Financing of artificial islands project in spotlight
Preliminary studies on the Kau Yi Chau Artificial Islands, or Lantau Tomorrow project, will continue but the government will consider factors such as “public finance position” in its implementation timetable. A government source said the reclamation part of the project would be postponed.
9. Review on transport subsidy
The HK$2 subsidy scheme for elderly and disabled residents will be reviewed this year to see how it can be financially sustainable. Chan pledged that the scheme, which costs about HK$4 billion in 2023-24, would not be cancelled.
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10. Pyrotechnics and drone shows every month
The new shows are intended to create “many more enchanting moments” for visitors, while the Tourism Board will also revamp its nightly light-and-sound show, “A Symphony of Lights”.
11. HK$10 billion for cutting-edge industries
Companies in life and health technology, artificial intelligence (AI) and data science, advanced manufacturing and new energy technology will benefit. Cyberport will get another HK$3 billion for the launch of an AI subsidy scheme.
12. Economy to grow between 2.5 and 3.5 per cent
Further acceleration is expected between 2025 and 2028 at an average of 3.2 per cent. The budget deficit for 2023-24 reached HK$101.6 billion with fiscal reserves expected to be at HK$733.2 billion by the end of March. Given bond issuance this year, the deficit is predicted to reach HK$48.1 billion, while fiscal reserves will drop to HK$685.1 billion.