Hong Kong taxpayers will receive increased tax allowances, including the child allowance, starting in the 2026-27 fiscal year, the city’s finance minister has said.

Financial Secretary Paul Chan said during his annual budget speech on Wednesday that the basic allowance and the single parent allowance would each rise by nearly 10 per cent, from HK$132,000 to HK$145,000.

The married person’s allowance will also increase by nearly 10 per cent, from HK$264,000 to HK$290,000, the finance chief said.

The child allowance, as well as the additional child allowance, is set to rise from HK$130,000 to HK$140,000 – an increase of almost 8 per cent.

Those who support dependent parents or grandparents will also see increased tax allowances.

The allowance for dependents aged between 55 and 59 will grow from HK$25,000 to HK$27,000, while that for dependents over 60 years old will rise from HK$50,000 to HK$55,000 – increases of 8 per cent and 10 per cent, respectively.

In addition, taxpayers will receive up to a HK$3,000 salaries tax reduction for the 2025-26 assessment year, up from HK$1,500 previously.

The increased tax perks come as Chan estimates that the Hong Kong government will log a HK$2.9 billion budget surplus in 2025-26, following three consecutive years of fiscal deficits.

Suggestions from political parties

Shortly before Chan’s 2026 budget speech, pro-establishment parties urged the government to offer more tax incentives in a bid to boost the city’s low birth rate.

The Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), the city’s largest pro-establishment party, suggested in early February that the government should increase the child tax allowance to HK$150,000.

It also called for prolonging the newborn tax allowance from one to three years.

In his 2025 Policy Address, Chief Executive John Lee announced that starting in 2026-27, the HK$260,000 double tax allowance for parents of newborns would be extended from one to two years.

Meanwhile, other parties – the Liberal Party and the Business and Professionals Alliance for Hong Kong (BPA) – proposed raising the child tax allowance and introducing a “progressive child tax allowance.”

The Hong Kong Federation of Trade Unions urged the government to introduce a childcare allowance of HK$2,000 per month for parents with children up to the age of three.

Hong Kong has introduced a string of measures to promote child births over the past few years, including providing a one-off HK$20,000 payment to new parents from October 2023 to October 2026.