The Hong Kong Budget 2025-26 for Australian Expats

The recent unveiling of Hong Kong’s 2025-26 Budget by Financial Secretary Paul Chan Mo-po brings some implications for Australian expats living and working in the region.

At Ally Wealth Management, we’ve analysed the key components of this budget to help our Australian clients navigate the financial landscape in the coming year.

Economic Context and Fiscal Outlook

Hong Kong’s economy continues to show resilience, with two consecutive years of growth despite global challenges. The budget projects a deficit of HK$87.2 billion for 2024-25, improving to HK$67 billion for 2025-26, with fiscal reserves expected to reach HK$579.1 billion by March 2030.

For Australian expats, this balanced approach to economic management provides a relatively stable environment for financial planning. The government’s commitment to maintaining Hong Kong’s competitive tax regime without introducing new taxes or significant rate increases is particularly reassuring for those of us advising clients on long-term wealth strategies in the region.

Personal Tax Relief and Benefits

If you’re working in Hong Kong, you’ll see some modest but welcome tax relief in the coming year. The budget includes:

• Up to a 100% reduction in salaries tax for 2024-25, though capped at HK$1,500 per taxpayer
• A rates waiver for domestic properties for the first quarter of 2025-26, with a ceiling of HK$500

While these benefits are more conservative than last year’s (which capped tax relief at HK$3,000 and property rate waivers at HK$1,000), they still provide some financial breathing room.

For our Australian clients, it’s important to consider these tax benefits in the context of your global tax position. Be sure to seek personal advice and consider your overall tax residency, as well as any adjustments to your tax obligations back home in Australia.

Business Opportunities and Support

For Australian entrepreneurs and business owners operating in Hong Kong, several budget initiatives may be of interest to you:

Funding and Financial Support

The government is injecting HK$1.5 billion into two key support mechanisms:

1. The BUD Fund (Dedicated Fund on Branding, Upgrading and Domestic Sales)
2. The Export Marketing and Trade and Industrial Organisation Support Fund

These resources can provide crucial backing for businesses looking to expand their market reach, particularly into mainland China. The application processes are also being streamlined, making these funds more accessible than before.

For businesses facing cash flow challenges, the extension of the SME Financing Guarantee Scheme’s principal moratorium application period until November 2025 offers continued support. The banking sector has also committed over HK$390 billion for SME financing through the Taskforce on SME Lending.

E-Commerce Opportunities

The newly launched “E-commerce Express” program aims to boost Hong Kong’s digital commerce sector. Led by the Hong Kong Trade Development Council (HKTDC), this initiative will connect local businesses with major digital platforms and provide valuable resources including personalised consultations and specialised training.

For Australian businesses looking to tap into mainland China’s online market, this program could provide strategic entry points and valuable local expertise.

Property Market Considerations

The budget brings some positive news for property investors with an increase in the stamp duty threshold. Properties valued up to HK$4 million (previously HK$3 million) will now be subject to a minimal stamp duty of just HK$100.

For properties valued between HK$4,000,001 and HK$4,323,780, the stamp duty will be HK$100 plus 20% of the excess over HK$4 million. Properties valued above this threshold will be taxed according to existing arrangements.

While Hong Kong’s property market remains one of the world’s most expensive, these adjustments could benefit those looking at smaller investment properties or entering the market for the first time.

Sector-Specific Opportunities for Australian Professionals

Financial Services

Hong Kong continues to strengthen its position as a global financial hub with several targeted initiatives:

• Enhanced tax regimes for funds and family investment holding vehicles
• Improved listing processes and optimised thresholds for the stock exchange
• Plans to formulate proposals for promoting gold market development
• Extension of the pilot grant scheme for insurance-linked securities by three years

With Australia’s strong financial services sector, professionals in banking, wealth management, and fintech may find expanding opportunities in Hong Kong. The government’s ambition to establish Hong Kong as the world’s largest cross-boundary wealth management centre by 2028 signals continued investment in this sector.

Innovation and Technology

The budget places significant emphasis on innovation and technology, particularly artificial intelligence. Key initiatives include:

• A review of tax deduction arrangements for intellectual property rights
• The establishment of a GreenTech Hub at the InnoCentre in Kowloon Tong
• HK$100 million for a Pilot Manufacturing and Production Line Upgrade Support Scheme

For Australian tech professionals and entrepreneurs, these initiatives create a supportive environment for innovation, particularly in emerging fields like AI and green technology.

Maritime and Aviation

Australian professionals in shipping, logistics, or commodities trading should note the proposed half-rate tax concessions for eligible commodity traders. The government plans to introduce legislation next year, potentially creating significant tax advantages for businesses in this space.

The allocation of HK$210 million to install a comprehensive port community system will enhance data sharing among maritime stakeholders, improving operational efficiency throughout the supply chain.

In the aviation sector, Hong Kong is positioning itself as Asia’s first centre for aircraft dismantling, parts recycling, and trading. This emerging niche could offer unique opportunities for Australian aviation professionals looking to diversify their expertise.

Strategic Development: The Northern Metropolis

A centrepiece of Hong Kong’s long-term economic strategy is the development of the Northern Metropolis. This massive infrastructure project aims to create a new economic engine focused on innovation and technology while strengthening connections with the Greater Bay Area.

The government plans to fund this development through bond issuances of approximately HK$150-195 billion annually over the next five years. For Australian expats with a long-term horizon in Hong Kong, this development could shape future career opportunities and create new investment possibilities in both residential and commercial real estate.

Practical Considerations for Australian Expats

For Employees and Professionals

• Review your tax residency status and ensure your financial arrangements are optimised for both Hong Kong and Australian tax systems
• Consider the sectors receiving government support (fintech, green finance, AI) when planning your career development
• Evaluate your MPF (Mandatory Provident Fund) strategy in the context of your longer-term retirement plans, including Australian superannuation

For Business Owners and Entrepreneurs

• Explore the funding opportunities available through the BUD Fund and Export Marketing Support mechanisms
• Consider how your business might leverage the e-commerce initiatives to expand into mainland China
• If you’re in eligible sectors like commodities trading or green technology, investigate the specific tax incentives that could reduce your effective tax rate
• Evaluate whether Hong Kong’s deepening integration with the Greater Bay Area creates strategic advantages for your business

For Investors

• Consider how the stamp duty adjustments might influence property investment decisions
• Explore opportunities in sectors receiving government support, particularly those aligned with Hong Kong’s long-term development strategy
• Monitor the bond issuances related to infrastructure development, which may present new fixed-income investment options
• Evaluate potential opportunities emerging from the Northern Metropolis development, particularly for those with a long-term investment horizon

The Ally Wealth Management Perspective

At Ally Wealth Management, we see Hong Kong’s 2025-26 Budget as striking a careful balance between fiscal prudence and strategic investment in future growth. For our Australian clients, this creates a relatively stable environment for wealth building while offering specific opportunities in targeted sectors.

Hong Kong’s traditional advantages, low tax rates, strategic location, and role as a gateway to mainland China remain intact. The deepening integration with the Greater Bay Area further enhances these advantages, particularly for Australians looking to participate in China’s continued economic development.

While the budget’s tax relief measures are modest, the broader economic direction and targeted support for key industries create a favourable environment for both career advancement and wealth accumulation.

Ally Wealth Management is the trusted ally in finance for Australians at home and across the globe. As both Australian expats and residents, the founders of Ally have a unique understanding of the common personal financial challenges faced.

Book your complimentary appointment with our team at Ally Wealth Management to discuss how we can help you to achieve your financial goals.

Ally Wealth Management Pty Ltd is a Corporate Authorised Representative of Sentry Advice Pty Ltd ABN 77 103 642 888. Sentry Advice holds an Australian Financial Services Licence (AFSL) No. 227 748.

General Advice Warning: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.