Business Hong Kong

Budget 2018: Hong Kong unveils HK$250k electric car tax concession for eligible drivers who scrap old vehicles

Financial Secretary Paul Chan has announced a “one-for-one replacement” scheme to allow eligible private car owners to scrap an eligible private car and switch to an electric private vehicle to enjoy a higher first registration tax concession of up to HK$250,000.

The new concessions will remain in force until March 31, 2021. It was proposed in Wednesday’s budget as the government said it wished to contain the number of private cars in order to prevent traffic congestion and the aggravation of roadside air pollution.

Before 2o17, the first registration tax for electric private cars was waived in full to promote wider usage. However, it was vastly reduced last year in Chan’s budget under former chief executive Leung Chun-ying – providing only up to HK$97,500 in tax concessions.

Tesla

A Tesla electric car on display in Hong Kong. Photo: Wikimedia Commons.

The 2017 policy caused a significant drop in purchase of electric private vehicles – as of November last year, only 81 new electric private vehicles were registered. Meanwhile, there was an increase in the general number of private cars, as consumers purchased traditional vehicles.

The eligible old cars must be registered in Hong Kong for at least six years, and the owners must have owned the car for at least three years.

“To improve roadside air quality and reduce air pollutant emissions in a sustained manner, we will continue to encourage walking and the use of public transport, and take forward other initiatives, such as promoting the use of electric vehicles,” Chan said.

“As for electric private cars, on the one hand, the government has to contain the number of private cars to prevent traffic congestion and aggravation of roadside air pollution; on the other hand, we hope to encourage car owners to go for electric vehicles as far as possible.”

Paul Chan

Paul Chan. Photo: Catherine Lai/HKFP.

Meanwhile, the first registration tax of electric commercial vehicles, electric motor cycles and electric motor tricycles will be waived in full until March 31, 2021.

Chan announced a surplus of HK$138 billion from the 2017-18 financial year on Wednesday. Fiscal reserves are expected to reach HK$1,092 billion by March 31, while the Housing Reserve will reach HK$78.8 billion.


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Budget 2018: Hong Kong unveils HK$250k electric car tax concession for eligible drivers who scrap old vehicles