A double-deck KMB ebus rolls out during a trial run in Kwun Tong on July 27, 2023. (CALVIN NG / CHINA DAILY)

The proposed concessions reduction for the first registration tax (FRT) on electric vehicles (EVs) is not expected to have a significant impact on Hong Kong people’s willingness to purchase EVs, Tse Chin-wan, secretary for environment and ecology, said on Friday.

He was making his remarks a few days after Hong Kong’s 2024-25 Budget was announced on Wednesday, which stated that promoting the use of new energy vehicles is a significant step toward establishing Hong Kong as a green city. The budget proposed extending the FRT concessions for EVs, due to expire at the end of March, by two years, while reducing the concessions by 40 percent.

The government and the Hong Kong Monetary Authority have a basket of tools to deal with various situations, and the authorities will monitor developments in the property market closely

The maximum FRT concession for electric private cars (e-PCs), granted under the One‑for‑One Replacement Scheme, will be adjusted to HK$172,500 ($22,035), while the ceiling for general private e-PCs will be lowered to HK$58,500.

READ MORE: Hong Kong eyes 70% zero-carbon electricity by 2035

Other types of EVs, including electric commercial vehicles, electric motorcycles, and electric motor tricycles, will continue to enjoy full exemption from the FRT for the next two years.

When sharing the details of these plans, Tse pointed out that the impact of these adjustments would not be significant given the existing characteristics of the EV market. Factors such as the increasing availability of EV models, decreasing prices, and lower fuel costs compared to traditional fuel-powered cars have already made EVs attractive for consumers.

The budget also proposed the launch of a pilot program for solar power generation at the Electrical and Mechanical Services Department Headquarters in Kowloon Bay, with the aim of exploring the application of solar power technology to the facades of government buildings while providing renewable energy for the building itself.

“This is a brand new concept, and we will kick off research work within this year to develop detailed plans for the scheme,” the environment chief said.

Responding to questions about how the government will react if the city’s property prices continue to fall following the scrapping of three stamp duties, as proposed in Wednesday’s budget, Secretary for Housing Winnie Ho Wing-yin said that the government and the Hong Kong Monetary Authority have a basket of tools to deal with various situations, and the authorities will monitor developments in the property market closely.

To stimulate the sluggish real estate market, Financial Secretary Paul Chan Mo-po announced in the budget that the government would cancel property curbs – Buyer’s Stamp Duty for non-permanent residents, New Residential Stamp Duty for second-time purchasers, and Special Stamp Duty.

READ MORE: Hong Kong to introduce 4,000 hi-tech electric taxis this year

The Hong Kong Monetary Authority has also eased mortgage rules, suspending stress tests and allowing some home buyers to make purchases with a smaller down payment.

If necessary, these cooling measures could be reinstated, Ho pointed out.

Hong Kong’s home prices fell 7 percent last year, while the number of transactions declined by 5 percent to a low of about 43,000.

Contact the writer at irisli@chinadailyhk.com