Hong Kong's 2024-25 Budget Announced

On 28 February 2024, Chan Mo-po, the Financial Secretary of the Hong Kong Special Administrative Region, delivered the 2024-25 Budget.

The year 2023 is a year of recovery for the Hong Kong economy after the epidemic, a year of uncertainties in the external environment, and a year of relatively difficult economic environment. The theme of the 2024-25 Budget is: "Advance with Confidence. Seize Opportunities. Strive for High-quality Development." The HK government has also announced a series of relief measures, including tax concessions, abolition of demand-side management measures (DSMMs) for residential properties and so on. The main measures are as follows:

Relieving People's Hardship

  • Provide rates concession for domestic properties for the first quarter of 2024/25, subject to a ceiling of HK$1,000 for each rateable property
  • Reduce salaries tax and tax under personal assessment for the year of assessment 2023/24 by 100%, subject to a ceiling of HK$3,000 for each case (you're welcomed to use the HK Salaries Tax Calculator to quickly calculate salaries tax and property tax)
  • Provide an additional half month of CSSA, Old Age Allowance, Old Age Living Allowance or Disability Allowance, and Working Family Allowance
  • Extend the first registration tax (FRT) concessions for electric vehicles under the One-for-One Replacement Scheme for 2 years, but the concessions will be reduced by 40%

Supporting Enterprises

  • Reduce profits tax for the year of assessment 2023/24 by 100%, subject to a ceiling of HK$3,000 for each case
  • Provide rates concession for non-domestic properties for the first quarter of 2024/25, subject to a ceiling of HK$1,000 for each rateable property
  • Extend the application period for the 80% and 90% Guarantee Products under the SME Financing Guarantee Scheme for 2 years to the end of March 2026, and the total guaranteed commitment under the Scheme will increase further by HK$10 billion
  • Make continuous enhancements to the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) and launch the E-commerce Easy, providing support of up to HK$1,000,000 per enterprise for implementing e-commerce projects in the Mainland
  • Promote the Digital Transformation Support Pilot Programme, and invite SMEs in the food and beverage industry and the retail industry to implement basic digital solutions. It is expected that at least 8,000 eligible SMEs will benefit from the Programme
  • Introduce two enhancement measures for deduction of expenses under profits tax: with effect from the year of assessment 2024/25, (1) profits-tax payers will be granted tax deduction for expenses incurred in reinstating the condition of the leased premises to their original condition; and (2) the time limit for claiming the allowances for industrial buildings and structures as well as commercial buildings and structures will be removed

Real Estate and Stock Market Policies

  • Abolish all DSMMs for residential properties. In other words, the Special Stamp Duty, the Buyer's Stamp Duty and the New Residential Stamp Duty will no longer be charged on all residential property transactions from 28 February 2024 onwards
  • Further adjust the countercyclical macroprudential measures for property mortgage loans and suitably adjust other related supervisory requirements on property loans
  • Establish the listing regime for specialist technology companies, set up the Hong Kong Dollar - Renminbi Dual Counter securities model, and reform the Growth Enterprise Market (GEM), so as to develop the stock market and enhance the listing regime
  • Waive the stamp duties payable on the transfer of real estate investment trust (REIT) units and the jobbing business of option market-makers
  • Extend the Green and Sustainable Finance Grant Scheme to 2027 and expand the scope of subsidies to cover transition bonds and loans

Besides, with the distinctive advantages under "One Country, Two Systems", the HK government will attract enterprises, capital and talent and build the Hong Kong brand on all fronts, will continue to increase the tobacco duty and will accelerate the promotion of Hong Kong's high-quality development, including moving towards a green future, digital economy, international finance, international trade, life and health technology, R&D and transformation in I&T, culture center and so on. Through the Fiscal Consolidation Programme, the HK government will also strengthen economic recovery by issuing funds and bonds and deepening financial cooperation in the GBA.

Overall, owing to global interest rate hikes, economic slowdown and continued geopolitical tensions, the 2024-25 Budget is more cautious. Despite many challenges, we believe that with the solid support of the country, the policy integration of the HK government and the combatant spirit of HK people, we will be able to give full play to our unique strengths. By blazing new trails and firmly pressing ahead, Hong Kong will certainly thrive and prosper, like a dragon soaring far and high in the boundless sky.

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