Electric car buyers get new HK$250,000 tax break but will it boost Hong Kong’s flailing market?
Buyers can enjoy the break on a new purchase if they trade-in a car that is at least six years old in a move the government hopes will increase zero-emission vehicles on the city’s roadways
Electric car buyers in Hong Kong who wish to enjoy a tax break of up to HK$250,000 must first scrap a car in a one-for-one replacement scheme announced by Financial Secretary Paul Chan Mo-po on Wednesday.
However, a HK$97,500 (US$12,500) cap on the current tax break for electric vehicles (EVs) would stand, after its implementation last year all but stifled the electric car market in Hong Kong.
A government source admitted it was hard to predict whether the measure, which takes effect immediately, would boost flagging sales of zero-emission vehicles.
Has Hong Kong pulled the plug on electric cars?
To enjoy the higher tax break, private buyers must first scrap another car in a one-for-one swap, intended to maintain the number of cars on the road.
The car to be scrapped must be at least six years old, while the applicant must have owned the vehicle for three consecutive years or more.
The stringent rules are believed to curb opportunistic buyers who snap up cheap vehicles for disposal and enjoy the tax break.
The HK$250,000 tax break would cover the first registration tax of private cars valued at HK$377,500 or less. A source from the government indicated four out of six carmakers sells EVs in that price range.
