Hong Kong’s 2026 Policy Address proposes preferential corporate tax rates for strategic sectors, enhanced incentives for corporate treasury centres and intellectual property investment, and expanded REIT and sector-specific concessions, alongside higher child tax allowances and stamp duty relief for eligible families.
Hong Kong has announced the release of the Hong Kong Chief Executive’s 2026 Policy Address on 16 September 2026.
The tax policy measures outlined in the Hong Kong Chief Executive’s 2026 Policy Address form a central part of the HKSAR Government’s strategy to align with the National 15th Five-Year Plan and implement Hong Kong’s First Five-Year Plan. These measures fall into two primary categories: family and population support to encourage fertility, and targeted fiscal incentives to consolidate Hong Kong’s position as a global financial, trade, maritime, and innovation hub.
The key Tax policy plans are:
Corporate tax incentives, preferential rates & intellectual property deductions
To attract strategic enterprises, solidify Hong Kong’s corporate headquarters ecosystem, and encourage technology commercialisation, the Government is establishing specialised corporate tax concessions:
- 5% or half-rate preferential corporate tax rate: Under dedicated preferential policy packages, qualifying high value-added enterprises operating in strategic sectors—including finance, advanced manufacturing, R&D in I&T, headquarters activities, and logistics/supply chain management—will be offered a 5% or half-rate preferential profits tax rate (reducing the standard 16.5% profits tax rate down to 8.25% or 5%). An amendment bill will be submitted to LegCo in Q4 2026.
- Corporate Treasury centres (CTCs) tax benefits: Following public consultation, an amendment bill will be introduced in the first half of 2027 to offer pre-approved CTCs and associated companies enhanced tax benefits and operational flexibilities.
- Intellectual property (IP) capital expenditure tax deductions: To lower IP trading costs and support technology transfer, a bill will be introduced within 2026 allowing tax deductions for capital expenditure incurred when purchasing IP rights or licensing IP rights.
- Funds, single-family offices & carried interest regimes: The Government is stepping up global promotion following the passage of legislation enhancing preferential tax regimes for funds, single-family offices, and carried interest, aiming to assist at least 220 family offices in setting up or expanding operations between 2026 and 2028.
Real estate market structuring
Real Estate Investment Trusts (REITs) stamp duty waiver: Following a bill introduced in 2026 to facilitate REIT privatisation and restructuring, the Government plans to introduce a separate bill in the first half of 2027 to provide a stamp duty waiver for the transfer of non-residential properties into REITs seeking to list.
Sector-specific tax concessions, duty controls & tax policy overview
The Policy Address expands sector-specific fiscal concessions while reinforcing enforcement mechanisms for excise duties and customs compliance:
- Commodity and gold trading: A half-rate tax concession has been introduced for physical commodity trading, with consultations planned in 2027 on additional concessions for qualifying gold and commodity trading activities.
- Maritime services: An amendment bill has been introduced to enhance existing tax concessions for high value-added maritime service providers.
- Tobacco and excise controls: Hong Kong will fully implement a duty stamp system for cigarettes by 31 December 2027, alongside mandatory plain packaging, to strengthen excise controls.
- Illicit fuelling and cross-boundary trade: Planned measures include higher criminal penalties for illicit fuelling and a Cross-boundary Trading Guidebook on MiMEP customs, excise, and tax requirements in the first half of 2027.
- VAT, GST, and transfer pricing: The 2026 Policy Address does not propose changes to VAT, GST, or statutory transfer pricing rules, maintaining Hong Kong’s territorial and low-rate tax system.
Personal tax allowances, family support
To address demographic challenges and encourage fertility, the 2026 Policy Address introduces several targeted tax relief and duty concession measures for families welcoming a second or subsequent child on or after 16 September 2026:
- Basic child tax allowance increase: Under Salaries Tax and Personal Assessment, the basic child tax allowance for a taxpayer’s second or subsequent child born on or after 16 September 2026 increases by 14.3%, from HKD 140,000 to HKD 160,000 per child. This allowance remains claimable until the child reaches age 25 under established procedures.
- Additional child tax allowance increase: The additional tax allowance granted during the first two years following the birth of a second or subsequent child born on or after 16 September 2026 also rises from HKD 140,000 to HKD 160,000. Both child tax allowance increases take effect from the 2026/27 year of assessment, with an amendment bill scheduled for introduction into the Legislative Council (LegCo) in the first half of 2027.
- Home buyer stamp duty waiver for families with newborns: Permanent-resident families purchasing a residential property within one year before or two years after the birth of a child (born in Hong Kong on or after 16 September 2026) are eligible for a stamp duty waiver capped at HKD 20,000. The amendment bill for this measure will be introduced in the first half of 2027.
