Tax Planning
Hong Kong Budget 2026/27: Credit Planning and Stamp Duty Strategy
The 2026/27 Budget introduces one-off tax reductions and changes in allowances & stamp duty—strategies for businesses and individuals to optimize savings.
By NomadicTax Research Team • 5-8 min read • September 5, 2026
## One-Off Tax Reduction—What You Can Do Now
Hong Kong’s Budget for the year of assessment **2025/26** includes a **100% reduction** of profits tax, salaries tax, and personal assessment tax, but with a cap of **HK$3,000 per case**. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai)). Individual taxpayers with only salary income will benefit directly; those running businesses should see corresponding savings in profits tax.
### Planning Tip:
If you expect to owe tax for 2025/26 across multiple sources (salary, business, rentals), consider whether electing **personal assessment** (which consolidates income types) gives you more favorable outcomes. The cap applies per case, so strategic election may increase benefit.
## Adjusted Allowances—Make Them Count
From 2026/27 onwards, several allowances have increased: basic, married person’s, single parent, child, additional child, and dependent parent/grandparent allowances, plus deduction ceiling for **elderly residential care expenses** rising from **HK$100,000 to HK$110,000**. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
### Actionable Steps:
- Check your eligible dependents’ ages to ensure you maximise dependent parent/grandparent allowances.
- If considering for newborns born after April 1, 2025, note that the additional child allowance period is extended **from 1 year to 2 years**. Claim early. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
## Stamp Duty Reforms—Who Takes the Hit
Three important changes:
1. **Residential property sales above HK$100 million** now see **stamp duty increased from 4.25% to 6.5%** for any instrument executed **on or after February 26, 2026**. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
2. Criteria for **stamp duty relief for intra-group property transfers** are relaxed to widen eligibility. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
3. Waiver of stamp duty for **non-residential property transfers** into REITs if certain conditions are met, aimed at encouraging institutional investment. ([ird.gov.hk](https://www.ird.gov.hk/eng/tax/budget.htm?utm_source=openai))
### Strategy Tips:
- Consider delaying large transactions unless you clearly qualify for relief or are unaffected by the increased rate.
- Realtors and property investors should assess how intra-group setups change or simplify transactions under new relief criteria.
- REITs may benefit from strategic acquisition planning given the waiver, if current or prospective structures satisfy the new conditions.
## Example
A married couple with one newborn born in mid-2025 will from **2026/27** claim **child allowance and additional child allowance at HK$140,000 each**, and double that allowance for the first two years post-birth under the extended period. The combined allowance boost plus one-off tax reduction could reduce their overall tax bill significantly—perhaps thousands of HK dollars depending on income bracket.
**Bottom Line:** The Budget’s measures open doors for both short-term relief (via one-off reductions) and longer-term savings via allowances and property transaction planning. Best to review your 2025/26 income mix and upcoming real estate or REIT moves now.