Hong Kong Business Community Welcomes Extension of Government Leases Ordinance
Ordinance Will Provide Certainty for Land Lease Policy and Foster Stable Business Environment
The Hong Kong General Chamber of Commerce, the Chinese Manufacturers’ Association of Hong Kong, the Federation of Hong Kong Industries, and the Chinese General Chamber of Commerce welcome the “Extension of Government Leases Ordinance” (the Ordinance), which takes effect today (5 July) via the publication of Government Gazette Notices.
The new mechanism under the Ordinance will streamline the extension process through the publication of Extension Gazette Notices, which will increase certainty, boost owners’, investors’ and businesses’ confidence. It also makes the whole process more convenient for both the public and the business community.
The Lands Department has established under the Ordinance a new statutory mechanism for the extension of leases. This applies to general purpose leases without a right of renewal, including general residential, commercial and industrial leases, which will expire on or after 5 July 2024. The department must publish an “Extension Notice” in the Gazette at least six years before the leases expire, declaring that they will be extended.
Unless of significant public interest, general purpose leases will be extended for a term of 50 years without payment of an additional premium. However, an annual rent equivalent to 3% of the rateable value of the property will be charged.
The business community believes the new mechanism will ease cumbersome procedures for extending land leases as well as reduce costs. To enhance understanding of the new mechanism, they suggest that the Government conduct public education campaigns to clearly explain to stakeholders how the new extension mechanism operates and protects their interests.
The predictability of lease extensions will also facilitate approval of mortgages related to the properties, which will enhance the confidence of owners and investors, as well as strengthen Hong Kong’s status as an international financial centre. This demonstrates that the “One Country, Two Systems” will continue to safeguard long-term stability and prosperity for Hong Kong.
The new mechanism under the Ordinance will streamline the extension process through the publication of Extension Gazette Notices, which will increase certainty, boost owners’, investors’ and businesses’ confidence. It also makes the whole process more convenient for both the public and the business community.
The Lands Department has established under the Ordinance a new statutory mechanism for the extension of leases. This applies to general purpose leases without a right of renewal, including general residential, commercial and industrial leases, which will expire on or after 5 July 2024. The department must publish an “Extension Notice” in the Gazette at least six years before the leases expire, declaring that they will be extended.
Unless of significant public interest, general purpose leases will be extended for a term of 50 years without payment of an additional premium. However, an annual rent equivalent to 3% of the rateable value of the property will be charged.
The business community believes the new mechanism will ease cumbersome procedures for extending land leases as well as reduce costs. To enhance understanding of the new mechanism, they suggest that the Government conduct public education campaigns to clearly explain to stakeholders how the new extension mechanism operates and protects their interests.
The predictability of lease extensions will also facilitate approval of mortgages related to the properties, which will enhance the confidence of owners and investors, as well as strengthen Hong Kong’s status as an international financial centre. This demonstrates that the “One Country, Two Systems” will continue to safeguard long-term stability and prosperity for Hong Kong.