Tax relief methods for 2026 | See the 10 major tax-deductible items, eligibility, limits and tax-saving tips

Every tax season, many salaried employees are most concerned about one question: “What can I claim tax deductions for? How can I save the most?”
Under Hong Kong’s tax regime, there are a number of tax deductions, including the recent popular “three tax-saving essentials”, domestic rent deduction, home loan interest, and more. As long as you meet the eligibility requirements, you can reduce your taxable income and, in turn, lower the final amount of tax payable.

However, many people easily get confused about the conditions, caps and application methods for each deduction, for example:

• Can TVC and QDAP be claimed at the same time? 
• Can tax be deducted for medical insurance bought for parents? 
• Can you apply for rent and mortgage deductions at the same time? 
• Can the elderly residential care deduction and the dependent parent allowance be used together? 

This article from 10Life sets out the 10 most popular tax deduction methods for the 2025/26 year, together with the eligibility requirements and common misconceptions, so you can understand everything at a glance.
 

Many people think that “tax deductions” and “allowances” are the same thing, but their calculation methods are actually different.
 

Tax deductions

Calculated based on actual expenditure, for example:

• Deduction essentials
• MPF contributions
• Home rental deduction 
• Home loan interest 
• Donations 

Proof of actual expenditure is required.
 

Allowances

Determined by personal or family circumstances, and no proof of actual expenditure is required. For example:

• Married persons 
• Children 
• Parents 
• Single parents 

Tax deductions and allowances can be used together to reduce assessable income.

The so-called “big three tax-deductible products” generally refer to:

• MPF Tax Deductible Voluntary Contributions (TVC) 
• Qualifying Deferred Annuity Policy (QDAP) 
• Voluntary Health Insurance Scheme (VHIS) 

In recent years, these three types of products have become popular choices for many people before filing their tax returns, as they help ease the current tax burden while also providing retirement and medical protection.

Tax-deductible products’ deduction limits:

• TVC + QDAP (combined): HK$60,000
• VHIS  : HK$8,000 per insured person
   

It is particularly important to note that TVC and QDAP do not each have a separate tax deduction limit; instead, they share the same HK$60,000 tax-deductible cap.

MPF Tax Deductible Voluntary Contributions (TVC)

TVC stands for Tax Deductible Voluntary Contributions. It is an MPF tax concession introduced by the Government to encourage the public to save more for retirement.
In addition to the mandatory monthly MPF contributions, salaried employees may also open a separate TVC account and make additional contributions, thereby increasing retirement savings while enjoying tax benefits.
The contribution method is relatively flexible, with the option of:

• monthly regular contributions 
• a one-off contribution 

The contribution amount does not need to be linked to income and can be adjusted at any time according to one’s financial circumstances.
 

Key points of MPF Tax Deductible Voluntary Contributions (TVC):

• You can decide the contribution amount yourself
• Contributions may be made monthly or as a one-off payment
• You can increase, reduce, suspend, or restart contributions at any time
• It does not necessarily need to be linked to income
• Tax deduction benefits are available

Some MPF schemes may set minimum or maximum contribution requirements. However, please note that TVC funds are generally required to remain until retirement at age 65, or can only be withdrawn under circumstances specified by law. As such, they are more suitable for retirement savings rather than short-term investment or cash flow needs.

How are MPF Tax Deductible Voluntary Contributions (TVC) taxed?

TVC and Qualifying Deferred Annuity Policy (QDAP) share a combined annual tax deduction limit of HK$60,000

For example:

• TVC: HK$25,000 
• QDAP: HK$35,000 
• Total: HK$60,000

Please note that the tax deduction for Tax Deductible Voluntary Contributions (TVC) is calculated by tax year. Contributions are generally required to be made by 31 March each year; otherwise, they will usually be carried forward to the next tax year. In addition, TVC is not granted tax deduction automatically. Taxpayers must declare the relevant contribution details in their tax return; otherwise, the Inland Revenue Department may not process it automatically.

What is the difference between MPF Tax Deductible Voluntary Contributions (TVC) and ordinary voluntary contributions?

Qualifying Deferred Annuity Policy (QDAP)

A QDAP (Qualifying Deferred Annuity Policy, 合資格延期年金保單) is a deferred annuity product certified by the Insurance Authority and eligible for tax deductions. Many people use it for retirement planning, hoping to have a more stable income after retirement while also saving part of their tax during the contribution period.

The usual arrangement is to pay first and receive the annuity later: the policyholder pays premiums over a specified period, and once the accumulation period ends, annuity income starts to be received periodically.

Key points of QDAP

• Must be a QDAP product certified by the Insurance Authority
• The policy documents will generally bear the QDAP logo
• Shares the HK$60,000 tax deduction limit with Tax Deductible Voluntary Contributions (TVC)
• The deduction may be allocated in coordination with a spouse
• Can be used for retirement planning, providing a relatively stable source of income

In general, to qualify as an approved QDAP, a product must usually meet the following basic requirements:

• Total premiums of at least HK$180,000
• Contribution period of at least 5 years
• Annuity period of at least 10 years
• Annuity payments can start as early as age 50
   

How is QDAP tax-deductible?

If the taxpayer or a cohabiting spouse is the policyholder and is responsible for paying the premiums, they may claim the relevant tax deduction.

The combined tax deduction limit for each taxpayer for QDAP + TVC is HK$60,000; if both spouses are liable to tax, they may allocate the deduction between themselves, with a maximum combined claim of HK$120,000.

Based on the highest marginal tax rate of 17%, each person can save up to HK$10,200 in tax per year.

Many people think that any annuity product is tax-deductible, but that is not necessarily the case. Only QDAPs certified by the Insurance Authority are eligible. Immediate annuities or uncertified products generally do not enjoy the relevant tax benefits. To quickly determine whether a product qualifies, you may check whether the policy documents or product information bear the QDAP certification mark below before purchasing.

Voluntary Health Insurance Scheme (VHIS)

The Voluntary Health Insurance Scheme (VHIS) is a government-recognised healthcare protection scheme designed to encourage members of the public to purchase eligible policies, strengthen personal healthcare protection, and enjoy tax benefits at the same time.
The products are mainly divided into two categories: Standard Plans and Flexi Plans. Each insured person may claim up to HK$8,000 in tax deduction per year, and applications can also be made for multiple specified relatives (such as a spouse, children and parents), with no limit on the number of insured persons.
For example, for a family of five, if each person’s premium exceeds HK$8,000, the maximum deduction can reach HK$40,000. Calculated at the highest tax rate of 17%, this could save up to HK$6,800 in tax.

However, please note that the actual tax savings are not a direct HK$8,000 deduction; instead, they are calculated based on “actual premium × individual tax rate”.

For example, if the premium is HK$5,000 and the applicable tax rate is 17%, the actual tax savings would be HK$850. Even if the premium exceeds HK$8,000, the deduction remains capped at HK$8,000 per insured person.
 

MPF Mandatory Contributions

In addition to tax-deductible voluntary contributions, mandatory contributions under the Mandatory Provident Fund can also be claimed for tax deduction, but the two are fundamentally different and should not be confused. Under the Mandatory Provident Fund Schemes Ordinance, employees and employers must each contribute 5% of monthly salary, subject to a monthly cap of HK$1,500. The maximum deduction for this mandatory contribution is HK$18,000 per tax year, and this is calculated separately from the HK$60,000 cap for tax-deductible voluntary contributions and eligible deferred annuity premiums. The two do not affect each other.

Personal Education Expenses

From the 2017/18 tax year onwards, the maximum deduction for personal education expenses increased from HK$80,000 to HK$100,000. Taxpayers should claim the deduction for actual personal education expenses in the tax year in which payment is made.  
Eligible items:

• Tuition fees
• Examination fees

However, please note that the course of study must meet the following specific conditions:

• The course must be a prescribed education course taken by the taxpayer to acquire or maintain the qualifications required for employment, and must be directly related to the qualifications needed for the current or future employment
• The prescribed education course must be run by a specified educational provider, trade association, professional association or business association, or approved or recognised by an organisation specified in Schedule 13 to the Inland Revenue Ordinance

Elderly Residential Care Expenses

If you need to arrange for your parents, grandparents or great-grandparents to live in a residential care home, nursing home or similar institution, the related residential care expenses may be claimed for tax deduction, easing the family’s financial burden.
Maximum deductible amount per year: HK$100,000

When applying, the following conditions generally must be met:

• The elderly person is the taxpayer’s or the taxpayer’s spouse’s parent, grandparent or great-grandparent 
• He or she is aged 60 or above in the relevant tax year, or is eligible for disability allowance 
• The elderly person receives residential care in a qualifying residential care home 
• The fees are paid by the taxpayer or the taxpayer’s spouse 

Please note: this cannot be claimed at the same time as the dependant parent allowance. Many people think both can be claimed together, but in fact only one of the two options may be chosen for the same elderly person in the same tax year, and you need to decide how to make the claim yourself.
In addition, each elderly person may only be claimed by one taxpayer each year. If more than one child is eligible, coordination is required first.

Home Loan Interest Property owners can claim up to HK$120,000

Property owners can reduce their tax burden through the home loan interest deduction.

Currently:

• Basic limit: HK$100,000 
• Additional deduction: HK$20,000 
• Maximum total: HK$120,000 

Each taxpayer may claim up to 20 tax years in total, not necessarily consecutively.

Basic requirements:

• The property is located in Hong Kong 
• It is the taxpayer’s principal residence 
• The loan is used to purchase a residential property 

The following are generally not eligible:

• Renovation loans 
• Cash-out refinancing 
• Loans not used for buying a property 

Residential Rent Deduction Tenants can claim up to HK$100,000

Rent is also tax-deductible. The cap is HK$100,000. If the monthly rent is around HK$8,333, the deduction limit will generally be fully used up.
Basic requirements:

• Must be a tenant 
• The unit is located in Hong Kong 
• Used as a principal residence 
• A formal tenancy agreement is in place
• Stamp duty has been paid on the agreement

The following persons are generally not eligible:

• The taxpayer or the taxpayer’s spouse owns a residential property 
• Public housing tenants 
• Recognised occupants

Tax deduction for charitable donations｜Not all donations are deductible

Charitable donations are also tax-deductible, but not every “donation” qualifies.

Application requirements:

• Annual donations of at least HK$100
• Cap of 35% of income 

The recipient must be a recognised charitable institution, and it is advisable to keep official receipts.

The following are generally not eligible:

• Lottery tickets 
• Event registration fees 
• Donations with goods or services attached 
   

Assisted Reproductive Services Expenses

The government has introduced a new tax deduction arrangement for “assisted reproductive services expenses” from the 2024/25 tax year onwards, with an annual maximum deduction of HK$100,000. Please note that for married couples, the deduction is not HK$100,000 per person; instead, the maximum is HK$100,000 in total for both spouses.

Applications generally must meet the following basic requirements:

• The taxpayer or the taxpayer’s cohabiting spouse receives eligible assisted reproductive services
• The services must be provided by a licensed fertility centre in Hong Kong
• Relevant receipts and medical certificates must be retained

In addition, if the relevant expenses have already been reimbursed by insurance or compensated by other benefits, only the unreimbursed portion may be claimed.
 

When is the tax bill usually received?

In general, the Inland Revenue Department will send out tax bills progressively from October each year, giving taxpayers sufficient time to arrange payment of tax. If you have activated the eTax Bill service, you will need to log in to your “eTAX” account to view the latest assessment notice. More on the tax bill process

What should I do if I still have not received my tax bill?

If you have submitted your tax return but have yet to receive your tax bill, you may first check by the following methods:

• Call the Inland Revenue Department hotline: 187 8022 
• Log in to “eTAX” and check “Tax Position > Assessment” 
• Check whether the Inland Revenue Department’s registered address is correct 

Also note that if your income for the year of assessment does not reach the tax payment threshold, the Inland Revenue Department may not issue a tax bill. Learn more about tax bill information

Where should tax-deduction information be entered in the tax return?

Different tax-deductible items, such as VHIS, QDAP, TVC, rent and personal education expenses, must be filled in the designated sections of the tax return. Read the tax return guide

What are the benefits of e-filing tax returns? Can the deadline be extended?

By e-filing through “eTAX”, in addition to a more convenient process, you will usually also automatically receive an extra one-month grace period for filing your tax return.
For those who are often racing against the deadline, submitting electronically may be worth considering.

How can I buy VHIS, annuity and MPF in the most tax-efficient way?

Many people consider VHIS, QDAP and TVC at the same time, but their tax deduction methods and limits differ. For example, TVC and QDAP share a tax deduction limit of HK$60,000, while VHIS is calculated per insured person. Learn more about the tax-saving guide for the three tax-deductible options

If I discover that I have missed a tax-deductible item after filing my tax return, can I submit it later?

Yes. If you discover that information was omitted after submitting your tax return, you may apply to the Inland Revenue Department for amendments or submit the missing information. However, it is advisable to keep the relevant receipts, premium records and supporting documents for future verification.
 

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.