(Bloomberg) -- Hong Kong’s residents, non-local homebuyers and property developers are set to benefit from the city’s annual budget, as the government scraps measures that had cooled the housing market.

Measures to curb housing demand are canceled immediately, Financial Secretary Paul Chan said in his budget speech on Wednesday, during which he also detailed some HK$1 billion ($128 million) of spending on tourism measures including fireworks displays and efforts to host more mega events.

Gains in developer shares show market watchers were surprised by the full elimination of the residential stamp duties. Currently, non-residents pay a combined 15% of levies when buying property, while Hong Kong existing home owners pay 7.5%. Investors didn’t react as strongly to the efforts around boosting tourism. Tobacco firms face further tax increases, as do the city’s highest earners.

Read: Hong Kong Scraps Property Curbs to Boost Weak Housing Market

Here’s a closer look at the stakeholders that may benefit and those that may lose out from the budget unveiled Wednesday:

Winners

  • Hong Kong homebuyers and sellers: They are direct beneficiaries from bidding farewell to “spicy measures,” as the property curbs are known locally.
  • Mainland Chinese homebuyers: Residential stamp duty elimination supports sales to locals, but can also attract more homebuyers from mainland China, a key source of sales.
  • Luxury retailers: Retailers like Chow Tai Fook Jewellery Group and Prada could still draw Chinese shoppers on lower tax-exempted prices.
  • Real estate developers and agents: The tax rate for first-time buyers of properties under HK$9 million will be reduced to alleviate their burden. That should lift the residential property market, which saw prices slump last year amid higher interest rates.
  • Airlines: Cathay Pacific Airways Ltd.’s China business may get a boost from Hong Kong’s “events economy” plans like fireworks, which are generally banned on the mainland, and Individual Visit Scheme expansion.

Losers

  • The highest earners: A two-tier tax system will be introduced from April, with income of up to HK$5 million taxed at 15%, and anything higher than that being taxed at 16%. Previously tax for all individuals was capped at 15%. The move will affect about 12,000 people, or around 0.6% of taxpayers, Chan said.
  • Tobacco firms, smokers: The government is raising taxes on tobacco products by 80 Hong Kong cents per stick to help reduce the number of smokers. Tobacco-related firms like China Tobacco may be pressured.
  • Mid- to low-end retailers and grocers: ⁠They will continue to lose out to their mainland counterparts as currency variances prompt more from Hong Kong to travel to China for daily necessities and services.
  • Commercial real estate landlords: Commercial real estate tenants might not be those multinational brands anymore, instead they might get shops serving the local community instead, which potentially may drive the rents lower.

©2024 Bloomberg L.P.