2026 Budget Highlights: Five-Year Plan, EV Transition, and Disaster Relief

Hong Kong Launches First Five-Year Plan, Accelerates EV Industry Transition, and Allocates HK$4 Billion for Tai Po Fire Victims

Financial Secretary Paul Chan Mo-po delivered the 2026-27 Budget today. Faced with the challenge of record-low land revenue (HK$17.5 billion) in public finances, the government demonstrated a strong commitment to governance by announcing the first "Hong Kong Five-Year Plan" to align with national strategies. It also allocated resources to promote the electric vehicle industry and earmarked HK$4 billion to support those affected by the Tai Po fire, embodying the principles of "strategic leadership" and "people-first governance."

First "Hong Kong Five-Year Plan" Launched: AI+ Empowers Transformation

To align with the national "15th Five-Year Plan," the HKSAR government announced an upgrade to economic governance by formally launching the first "Hong Kong Five-Year Plan."

• Institutional Breakthrough: Through a systematic five-year plan, the predictability of industrial policies and resource allocation will be strengthened, ensuring Hong Kong continues to lead in finance, innovation and technology, and trade.
• Digital Foundation: HK$50 million will be allocated to promote AI training for all citizens and introduce leading AI technologies to improve the efficiency of public institutions, laying a solid foundation for a "digital and intelligent" Hong Kong in the next five years.
• Low-Altitude Economy: As the first key focus of the plan, manned aircraft testing and cross-border routes will be launched in the first half of the year, opening up new growth points.

Promoting the Electric Vehicle and Green Energy Industry Chain

The government is committed to transforming environmental challenges into economic opportunities. The budget clearly outlines the direction of strengthening the development of the electric vehicle industry:

• Industry Chain Upgrade: Through policy guidance, the government will attract EV-related R&D and supporting industries to establish themselves in Hong Kong, promoting Hong Kong as a green transportation demonstration window in the Asia-Pacific region.
• Tax Adjustments and Transition: Considering the market is maturing, the first registration tax concessions for electric private cars will end at the end of March. The government will focus resources on electric commercial vehicles and charging network construction to ensure the healthy development of the industry.
• Green Shipping: Funding will be allocated to subsidize ships refueling with green fuel in Hong Kong, accelerating the integration of the maritime industry with green energy.

HK$4 Billion Reserved to Support Tai Po Fire Recovery

Against the backdrop of fiscal consolidation, the government's commitment to citizens has not diminished, especially in response to recent public concerns about emergencies:

• Dedicated Funding: HK$4 billion has been reserved to provide comprehensive support to those affected by the Tai Po fire.
• Housing Arrangements: The funding will be prioritized to provide long-term housing arrangements for affected residents and to assist in the post-disaster reconstruction and psychological support mechanisms of the relevant communities.
• Social Security: The Financial Secretary emphasized that the government will ensure that affected citizens receive adequate financial and legal support on their road to recovery, embodying social inclusion and warmth.

Low Land Revenue and Land Strategy

Faced with a weak commercial market, the government is adopting a pragmatic land supply strategy:

• Record Low Land Revenue: The revised budget for land revenue this year is only HK$17.5 billion, a significant decrease of HK$3.5 billion from the original budget.
• Suspension of Sales: Considering the high vacancy rate, the government announced that it will continue not to sell general commercial land in the coming year.
• Those Who Can Afford More Should Pay More: Starting tomorrow (February 26), stamp duty on luxury homes worth over HK$100 million will be increased to 6.5%, an increase of 50%, to compensate for the shortfall in land revenue.

Fiscal Consolidation and People's Livelihood Security: Those Who Can Afford More Should Pay More, Stable Services

Under the "spending cuts first" consolidation plan, the government is striving to maintain the level of public services:

• Revenue-Generating Measures: A two-tiered salary tax system will be implemented (income exceeding HK$5 million will be increased to 16%), and the 3% hotel room tax will be restored in 2025.
• Subsidy Optimization: The HK$2 fare concession scheme and transportation subsidies will be reviewed with the goal of ensuring that the schemes can continue to operate in a financially sustainable manner, emphasizing that there is no intention to abolish them.
• Healthcare Rewards: The "Healthcare Voucher Reward Pilot Scheme" will be extended for two years to the end of 2028, continuing to protect basic healthcare needs.

The public can visit the official budget website to read the full report.
(https://www.budget.gov.hk/2026)