Takeaways from HK Budget 2025

Financial Secretary Paul Chan Mo-po delivered his Budget to the Legislative Council on Wednesday.   

He noted that "strictly containing public expenditure is a must" and to proceed in a steady and prudent manner and be careful to find a balance among the various impacts that may arise in the process to minimize the impact on public services and people's livelihood.

He added that the government have a clear pathway towards the goal of restoring fiscal balance in the Operating Account, in a planned and progressive manner.

Following are the key statements:

Support Measures
- Rates concession for domestic as well as non-domestic properties for first quarter of 2025/26, subject to a ceiling of HK$500 for each rateable property (read more)
- Reduce salaries tax and tax under personal assessment for the year of assessment 2024/25 by 100 percent, subject to a ceiling of HK$1,500
- Reduce profits tax for the year of assessment 2024/25 by 100 percent, subject to a ceiling of HK$1,500
- Maximum value of properties chargeable to a stamp duty of HK$100 will be raised from HK$3 million to HK$4 million with immediate effect (read more)
 

Amendment on HK$2 Fare Concession Scheme (read more)
- Concessionary fare to change to "$2 flat rate cum 80 per cent discount"
- Beneficiaries continue to pay HK$2 for trips with fare below or equal to HK$10
- 80 percent discount for trips with fare above HK$10
- Number of concessionary trips will be limited to 240 per month

Containing Government Expenditure (read more)
- Pay freeze for civil servants, executive authorities, the legislature, the judiciary and members of the District Councils
- Civil service establishment to be reduced by two percent each in 2026-27 and 2027-28
- By April 1, 2027, about 10,000 posts expected to be deleted within this term of government
- Raise the threshold of monthly public transport expenses incurred for receiving Public Transport Fare Subsidy Scheme from HK$400 to HK$500
 

Increasing Revenue
- Explore regulating basketball betting activities and invite Hong Kong Jockey Club to submit proposal (read more)
- Air passenger departure tax to be increased from HK$120 to HK$200 per passenger starting third quarter of 2025-26
- Application fee of HK$600 will be charged under various talent and capital investor admission schemes with immediate effect
- Review tolls of relevant government tunnels and trunk roads to embody the "user pays" principle
- Review annual licence fee for electric private cars, parking meter charges, as well as the fixed penalties for traffic offences

Tourism Industry (read more)
- Allocate HK$1.235 billion to Hong Kong Tourism Board in the coming year to boost tourism development
- Support staging more meetings, incentive travels, conventions and exhibitions
- Expected to bring about 183,000 additional visitor arrivals with spending of about HK$1.4 billion
- Develop markets in the Middle East and ASEAN to attract more high-end visitors
- Conduct a study to develop the waterfront and former pier sites to the south of Hung Hom Station into a new harbourfront landmark
- Set up yacht club in Hung Hom for promoting yacht tourism

Green Development (read more)
- Allocate additional HK$180 million for increasing the number of residential food waste smart recycling bins and food waste collection facilities
- Invited open tender for I·PARK2 with an expected treatment capacity of 6,000 tonnes per day
- Launch HK$300 million subsidy scheme to install 3,000 fast chargers for electric vehicles
- Earmark HK$470 million to subsidize franchised bus operators purchasing about 600 electric buses
- Earmark HK$135 million to subsidize taxi trade in purchasing 3,000 electric taxis

Housing and Land Supply
- Total public housing supply in the coming five years will reach 190,000 unit
- Completion of private residential units will be on average over 17,000 units annually in the coming five years
- Potential supply of first-hand private residential units for the next three to four years will be around 107,000 units
- Land Sale List of the coming year comprises eight residential sites (read more)
- Potential land supply for the whole year is expected to have a capacity for providing about 13,700 units
- Prepare land for about 80,000 private housing units in the coming five years
 

Attract Enterprises, Capital and Talents (read more)
- OASES will announce a new batch of more than ten strategic enterprises next month
- About HK$50 billion will be invested in Hong Kong by all the strategic enterprises while create more than 20,000 jobs over the next few years
- To organize the second "Global Talent Summit • Hong Kong" early next year
 

Artificial Intelligence (read more)
- HK$1 billion for establishment of Hong Kong AI Research and Development Institute
- To host the first International Conference on Embodied AI Robot (read more)
- To launch two-year Pilot Manufacturing and Production Line Upgrade Support Scheme (Manufacturing+) to provide funding of up to HK$250,000 each on a one-to-two matching basis to enterprises
- Explore a set of streamlined procedures for vetting licence applications for operating Low Earth Orbit satellites (read more)
- Support universities to set up life and health technology research institutes through the Subsidy Programme for the Setup of Life and Health Technology Research Institute

Northern Metropolis (read more)
- Earmarked HK$3.7 billion to expedite the provision of infrastructure and public facilities of Phase 1 development of the Hong Kong Park of Hetao Shenzhen Hong Kong Science and Technology Innovation Co-operation Zone
- Inviting market to submit expressions of interest for three pilot areas under "large-scale land disposal"  with the target of commencing tendering from the second half of this year

Bond Issuance
- Issue government bonds to ensure projects crucial to future development will not be impeded by fiscal position
- HK$150 billion to HK$195 billion worth of bonds will be issued during five-year period from 2025-26 to 2029-30
- About 56 percent of the bonds issued will be used for re-financing short-term debts
- Proceeds from bond issuance will be used to invest in infrastructure but not to fund government recurrent expenditure
 

Finance (read more)
- Explore establishment of post-delisting over-the-counter trading mechanism
- Review listing requirements and post-listing ongoing obligations
- Evaluate listing-related regulations and arrangements to improve the vetting process, optimise the thresholds for dual primary listing and secondary listing
- The Working Group on Promoting Gold Market Development will formulate a plan this year covering measures to enhance gold trading
- Promulgate second policy statement on the development of virtual assets to explore the innovation and application of virtual asset technologies (read more)
- Work to implement the linkage of faster payment systems of Hong Kong and mainland with a view to provide round-the-clock real-time, small-value cross-boundary remittance service for residents
 

Supporting Local Enterprises
- Inject HK$1.5 billion into the Dedicated Fund on Branding, Upgrading and Domestic Sales and the Export Marketing and Trade and Industrial Organisation Support Fund
- Funds dedicated for SME financing in the participating banks' loan portfolios increased to over HK$390 billion
- To launch "E-Commerce Express" with large-scale e-commerce platforms to provide local enterprises with one-to-one consultation services and thematic seminars
 

Education Industry
- Launch a new round of HK$1.5 billion Research Matching Grant Scheme to attract more organizations to support research endeavours of institutions
- Land sites granted at nominal premium with interest-free loans to support capacity expansion and quality enhancement of self-financing institutions
- Step up promotion of "Study in Hong Kong" brand to attract more non-local students
- Relax requirements of GBA Youth Employment Scheme to people aged 29 or below with sub-degree or higher qualifications, increased limit of allowance for enterprises to HK$12,000 per month per person for up to 18 months
- Offer 4,000 short-term internship placements in government bureaux and departments for tertiary students

Caring for the Elderly and Child
- Increase the vouchers under the Residential Care Service Voucher Scheme for the Elderly by 1,000 to 6,000 in total in the next financial year
- Increase the vouchers under the Community Care Service Voucher Scheme for the Elderly by 1,000 to 12,000 in total
- Formulate industry guidelines to encourage banks to offer elderly-friendly electronic banking services
- Provide additional annual provision of HK$186 million to increase emergency places for residential child care and strengthen professional support for child abuse victims and families
 

Maritime and Port Development Board
- Propose half-rate tax concession to eligible commodity traders
- Establish Hong Kong Maritime and Port Development Board this year to facilitate sustainable development of international maritime centre
- Initiated a study on development model for logistics sites in Northern Metropolis to develop modern logistics clusters
- Set aside HK$215 million to install port community system to develop smart port
 

Economic Outlook for 2025 and the Medium Term (read more)
- Hong Kong's economy is forecast to grow moderately this year, rising by two to three percent in real terms for the year
- Economy is forecast to grow by 2.9 percent on average a year in real terms from 2026 to 2029
- Underlying inflation rate is forecast to be on average 2.5 percent a year
 

Others
- Consult on specific proposals of MPF "Full Portability" this year
- Set aside HK$15 million for the work of Centre of Excellence for Major Project Leaders to boost construction industry development