Compliance
Hong Kong Allowances Raised: What Taxpayers Should Adjust Ahead of Year of Assessment 2026/27
Hong Kong just raised its allowances and deductions for 2026/27—if you’re filing for that year or affected by stamp duty changes, here’s what you need to know and act on.
By NomadicTax Research Team • 5-8 min read • September 12, 2026
## Overview of Changes Effective 2026/27
Hong Kong’s **2026-27 Budget**, legislated on **22 May 2026**, introduced several changes affecting individual taxpayers and property transactions. These changes begin from the **year of assessment 2026/27**, and also include a **one-off tax relief** for 2025/26. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
The main adjustments include:
- **One-off full tax reduction** for **profits tax, salaries tax, and personal assessment** in **2025/26**, capped at **HK$3,000 per case**. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
- **Increased allowances**: basic, married person’s, single parent, child allowance & additional child allowance, dependent parent/grandparent allowances—all enhanced. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
- **Elderly residential care expenses** deduction ceiling raised from **HK$100,000** to **HK$110,000**. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
- **Child allowance period extension**: newborns are now eligible for the **additional child allowance for two years** (instead of one). ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
- **Stamp duty changes**: vessels include increased rates for residential property over HK$100 million; also new reliefs proposed for intra-group transfers and REITs acquiring non-residential properties, subject to legislative enactment. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
## Who Should Take Action & How
| Affected Group | What to Adjust Now |
|---|---|
| Employees & individuals claiming allowances | Update your tax planning, especially around dependents and elder care deductions |
| Newborn parents (after 1 April 2025) | Plan for two-year additional child allowance eligibility |
| High net-worth individuals considering residential property above HK$100m | Factor higher stamp duty into your acquisition timing and negotiations |
| REITs and property developers acquiring non-residential property | Monitor relief criteria—it might offer savings if conditions met |
| Businesses and individuals with mixed incomes | Recalculate partial allowances and deductions; provisional tax estimates will reflect changes |
## Example Scenarios
- A taxpayer who already claims “basic allowance” will now see it increase from **HK$132,000 to HK$145,000**—a direct reduction of taxable income similarly affecting salaries tax or personal assessment. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
- Elderly residential care expenses paid last year in excess of the old cap may now be more fully deductible under the new **HK$110,000** ceiling — saving of **HK$10,000** where applicable. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
## Practical Tips to Maximize Benefits
- Check **date of birth** of children—if born on or after **1 April 2025**, they qualify for enhanced child allowance period. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
- Save and document all receipts for elder care expenses well in advance of filing. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
- For property deals, negotiate stamp duty charges or explore reliefs if buying under REIT or intra-group scenarios. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
- Use updated allowances to assess whether personal assessment yields greater savings vs. separate assessments.
## Comparative Insight: HK vs Taiwan Allowance Strategy
Both regions are increasing allowances for dependents and easing deductions for family expenses. Taiwan focuses on **child exemptions** and insurers, while Hong Kong builds on allowances and mobile deductions. For cross-border families or dual taxpayers, awareness of both regimes can avoid missed opportunities.
## Key Takeaway
If you’re an individual taxpayer in Hong Kong—especially a parent, caregiver, or investor—these changes for 2026/27 are significant. They reduce tax burdens and present opportunities, especially if you plan returns, purchases, or caregiving obligations carefully now.