Financial Secretary Paul Chan Mo-po delivered the new 2026-27 Budget today (Feb. 25). For the first time since the 2015-16 Budget, the cover is purple again, symbolizing that amid a fast-changing external environment, Hong Kong's economy is strengthening its intrinsic momentum.
As public finances have improved sooner than expected, with economic growth forecast at 2.5% to 3.5% this year, the public has been looking forward to "sweeteners". After reviewing the Budget measures, we have identified 10 initiatives that could be particularly beneficial to young people—take note.
In the Budget's introduction, Chan said he expects the city's economic momentum to remain solid this year.
1. AI Training for All
UGC-funded universities will introduce 27 new STEAM-related undergraduate programs. The Study Subsidy Scheme for Designated Professions/Sectors will prioritize AI-related programs from the 2027/28 academic year onward.
2. New Media Thematic Internship Programme in the Chinese Mainland
The government will provide young people with more exchange and internship opportunities in the Mainland and overseas, including launching a brand-new media-themed internship program in the Mainland. An additional $60 million will be allocated to continue implementing the Home and Youth Affairs Bureau (HYAB) Funding Scheme for International Youth Exchange.
3. 3,600 Short-term Internship Placements
Around 3,600 short-term internship placements will be provided in government departments and public bodies for post-secondary students, enabling young people aspiring for a public service career to gain experience.
4. HKUST to Develop the Third Medical School
The Government has earmarked resources to support, on a matching basis, the Hong Kong University of Science and Technology (HKUST) in developing the third medical school, with a target to admit its first cohort of students in the 2028/29 academic year. The new medical school will focus on nurturing talent with both clinical and R&D capabilities and on attracting more medical talent to take up teaching and research positions.
5. Rates Concession for Domestic and Non-domestic Properties (First Two Quarters of 2026/27)
Provide a rate concession for domestic properties for the first two quarters of 2026/27, capped at $500 per rateable property.
Provide a concessionary rate for non-domestic properties for the first two quarters of 2026/27, capped at $500 per rateable property.
6. One-off Reduction of Salaries Tax / Tax under Personal Assessment (Cap: $3,000)
Reduce salaries tax and tax under personal assessment for the year of assessment 2025/26 by 100%, subject to a ceiling of $3,000. The reduction will be reflected in the final tax payable for the year of assessment 2025/26.
7. One-off Reduction of Profits Tax (Cap: $3,000)
Reduce profits tax for the year of assessment 2025/26 by 100%, subject to a ceiling of $3,000. The reduction will be reflected in the final tax payable for the year of assessment 2025/26.
8. Increase in Basic Allowance / Single Parent Allowance / Married Person's Allowance
Starting from the year of assessment 2026/27, the Government proposes:
Increasing the basic allowance and single parent allowance from $132,000 to $145,000; and
The allowance for married individuals will be raised from $264,000 to $290,000.
9. Increase in Child Allowance
Increase the child allowance and additional child allowance from $130,000 to $140,000.
10. Increase in Dependent Parent/Grandparent Allowances + Higher Deduction Ceiling for Elderly Residential Care Expenses
Starting from the year of assessment 2026/27, the Government proposes increasing the allowance for maintaining a dependent parent or grandparent and raising the deduction ceiling for elderly residential care expenses, including the following adjustments:
For a dependent parent/grandparent aged 60 or above: increase the allowance from $50,000 to $55,000. The same increase applies to the additional allowance for taxpayers residing with these parents/grandparents.
For a dependent parent/grandparent aged 55 to 59: increase the allowance from $25,000 to $27,500. The same increase applies to the additional allowance for taxpayers residing with these parents/grandparents.
Raise the deduction ceiling for elderly residential care expenses from $100,000 to $110,000 for taxpayers whose parents or grandparents are admitted to eligible residential care homes.
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