Hong Kong and Singapore Property Shrug Off Fund Tax Breaks

Nicholas Spiro is a partner at Lauressa Advisory, a specialist London-based real estate and macroeconomic advisory firm.

Published: 4:30pm, 31 Aug 2026

The long-standing rivalry between Asia’s two leading financial centres is heating up. As Hong Kong and Singapore compete harder for investment talent, tax incentives for fund managers have emerged as the new battleground.

A government bill working its way through Hong Kong’s Legislative Council would result in sweeping changes to tax rules on carried interest. The legislation, which is expected to be approved later this year, would offer preferential tax treatment to a wider range of alternative investment groups.

The move by Hong Kong prompted a swift response from Singapore. On August 19, Singapore’s central bank announced a package of measures designed to enhance the appeal of the asset management industry, including a proposal that would exempt a share of profits made by fund managers when they deliver strong returns for investors in qualifying funds.

Wall Street banks are already assessing the broader implications of the reforms. In a report on July 31, Citigroup said the changes to Hong Kong’s preferential tax regime were “a structural catalyst for capital and talent inflows into [Hong Kong]” that would support demand in the real estate market.

If 3 per cent of fund managers from mainland China and Singapore relocated to Hong Kong, creating 1,500 new asset management positions, the grade A office market in Central, Admiralty and West Kowloon would benefit from 150,000 sq ft of additional take-up. In the housing market, demand for high-end homes would increase by 2 per cent if the relocations occurred within a year, Citigroup said.

That said, tax competition is not a key determinant of the performance of Hong Kong’s real estate market. “The read-across to the property market is not that clear,” said Cathie Chung, senior director of research at JLL in Hong Kong. The rivalry between Hong Kong and Singapore has had little bearing on the fundamentals of both cities’ property sectors.