Cost of living in Hong Kong

If you’re considering a long-term relocation to Hong Kong, addressing the financial needs of you and your family is an essential part of your planning.

Life in Hong Kong isn’t cheap. In fact, the region is ranked as the second most expensive place in the world to live. Figures released by the expatriate website Expatistan in January 2018 show that though food and drink generally don’t cost a lot of money, rentals and property prices do. A standard lunchtime meal in downtown Hong Kong will set you back HK$ 95.12 (one HK dollar equals 0.13 US dollars — exchange rate correct as of 1 February 2018). But monthly rent for a furnished studio flat in an expensive area can cost HK$ 22,747.18

Family homes in Hong Kong will be more expensive, as chances are you’ll be looking at larger properties. You’ll also have to ensure that you can afford the princely sum of HK$ 26,964.49 for a900 sq ft furnished apartment in cheaper part of town. This price doesn’t include utilities or other charges.

One of the main reasons for the high accommodation prices is the shortage of land. With seven million people squeezed into just 405 square miles it’s easy to understand why land is such a precious commodity. But it is possible to live and work in Hong Kong without blowing your bank balance. Public transport is efficient and cheap — it also makes a great place for people-watching and learning a little more about Hong Kong.

Economising is possible

The cost of living in Hong Kong varies between locales — you don’t have to live in the most expensive part of town. Instead of opting for the densely populated Wan Chai district, try venturing further afield. Living expenses in Kowloon district are cheaper than Hong Kong Island and the district is becoming increasingly accessible thanks to the advent of the Mass Transit Railway (MTR). A look at this map will help you to understand the distances involved.

General utility costs will amount to HK$ 854 based on a single person living in a 480 sq ft apartment. This price includes, heating, gas and electricity. If you want to employ someone to help you keep your living space clean, expect to pay around HK$ 60 per hour.

For getting around you can buy a car (a Volkswagen Golf for example, will cost you about HK$ 243,385) or you can stick with public transport, which is efficient and doesn’t add to Hong Kong’s pollution problem. A monthly pass will set you back around HK$ 510.

Salaries

Most expats tend to work for overseas companies, where salaries are generous. You can expect to earn US$ 148,410 according to the annual HSBC survey. And it’s not simply good salaries that make Hong Kong such a magnet for expats. HSBC discovered that almost seven in 10 expats found that career progression was easy in the former colony, and 78% were in full-time work. Salaries are set to rise by 5% over the coming year for mid-level managerial positions. The financial services are the main employers at 36%, with the education sector coming second at 11%. The Hong Kong work/life balance is another attraction, and 58% have more disposable income than in their home countries.

Taxes

Wherever you live and work in the world you will pay taxes. This maxim applies to expats working in Hong Kong, and taxes here are considered to be ‘among the lowest in the world.’  Salary or personal tax consists of four brackets, starting at 2% and rising through 7%, 12% and capped at 17%. Inheritance and capital gains tax don’t exist here, and you’ll only be taxed on income that you earn in Hong Kong. Allowable deductions are generous, and you may be surprised to discover that you can claim for dependent close relatives in your tax deductions. Many expats are employed by an overseas employer, and, in this case you’ll only be taxed on income that’s classified as ‘income attributable to the services you render in Hong Kong.’ Your employer will be the best person to answer any tax queries you may have.

Shopping

Food shopping can be pricey, especially if you favour western-style supermarkets. The selection can be disappointing, and some products may be on the shelves one week and disappear the next. As eating out is so cheap, many expats resort to this as a solution. Basic personal essentials are reasonably priced with a roll of deodorant costing about HK$38, and four rolls of lavatory paper coming in at HK$14. 450g of chicken breast will cost HK$49.36, though around one litre of milk will come to HK$23.29.

Shoes and clothing are inexpensive. Many expats take advantage of Hong Kong’s flourishing tailoring industry to order custom-made suits. If you select a suit from Sam’s Tailor in Kowloon, you can expect to pay around HK$ 3911. But, ordering a tailored suit from A-Man Hing Cheong will set you back HK$ 9386.83. Given the importance that the Hong Kong Chinese place on business attire, ordering several custom-made suits will be a sensible investment, for both men and women.

It's always a good idea to keep track of what you're spending, wherever you live in the world. Here are our top tips to help you save money when you’re working abroad.¹