2023 Policy Address – Tax-related Policy Measures (on Individuals)

On 25 October 2023, the Chief Executive proposed in his 2023 Policy Address that, to promote fertility and create a children-friendly environment, the following tax measures under salaries tax and personal assessment will take effect from the year of assessment 2024/25:

Raising the deduction ceiling for home loan interest or domestic rents from the current $100,000 to $120,000 for taxpayers who reside with his / her first child born on or after 25 October 2023, until the child reaches the age of 18. (The relevant legislation was passed by the Legislative Council and gazetted on 31 May 2024)
Providing deduction for expenses on assisted reproductive services, subject to the ceiling of $100,000 per year. (This measure can only be implemented after completion of the relevant legislative process)

Highlights of the measures on the increased deduction of home loan interest / domestic rent are provided here whereas those on deduction for expense on assisted reproductive services are provided here.

Frequently asked questions (FAQ) on (i) the additional deductions of home loan interest / domestic rent, and (ii) the deduction for the expenses on assisted reproductive services are also provided.

Raising the deduction ceiling for home loan interest or domestic rents for taxpayers who reside with his / her new born child

The Chief Executive proposed in his 2023 Policy Address that, for the purposes of supporting families with new borns, starting from the year of assessment 2024/25, the deduction ceiling under salaries tax and personal assessment for home loan interest or domestic rents will be raised from $100,000 to $120,000 if certain prescribed conditions are met. In general, if a taxpayer resides with his / her first child born on or after 25 October 2023, the deduction ceiling will increase to $120,000 until the child reaches the age of 18. The relevant legislation was passed by the Legislative Council and gazetted on 31 May 2024.

Providing deduction for expenses on assisted reproductive services

The Chief Executive proposed in his 2023 Policy Address that, for the purposes of enhancing the fertility rate, starting from the year of assessment 2024/25, there will be deduction under salaries tax and personal assessment in the amount of $100,000 for expenses incurred on assisted reproductive services so as to ease the financial burden of the relevant couple. This measure can only be implemented after the completion of the relevant legislative process.