The Lands Department has said that “2047 is not a ‘time limit'” when it comes to land administration and that the “government will have to make arrangements to deal with the significant caseload of lease extension applications at a suitable juncture.” It also said that extensions and new leases with a term of 50 years currently granted by the department “obviously go beyond 2047.”
2047 marks the final year of the One Country, Two Systems principle, a 50-year agreement which gave rise to the city’s autonomy in 1997. “Half of Hong Kong’s leases are due to expire” that year, according to Professor Edwards Yiu Chung-yim, lawmaker-elect for the architectural sector this coming legislative term.
Yiu raised questions regarding the issue earlier that day, saying that if the problems remain unresolved, people may be discouraged from buying property in certain areas.
Disrupted property market
As an example, he said that if the problem remains in ten years time [in 2027], no one will invest in property north of Boundary Street as the leases in that area will expire by June 30, 2047. It would mean there would be only 20 years left on the lease. This would affect the property market, he said.
Boundary Street used to mark the border between the colony of Hong Kong and the New Territories. Its land leases were due to expire on June 27, 1997, until the Sino-British Joint Declaration extended all leases up to June 30, 2047. South of the street, however, land leases last for 75, 99, or 999 years.
Yiu also warned that the banks may halt 25-year mortgages if no clear conclusion can be made by 2022, a decision which would directly affect the property market. He told Apple Daily that residents should not be made to delay buying property because of land lease problems and that he hopes the government can produce a plan so that the property and mortgage market will not be affected.
The Lands Department cited policies in a statement, stating that leases may “upon expiry and at the sole discretion of the HKSAR Government, be extended for a term of 50 years without payment of an additional premium.” Extended leases may be subject to annual rents at 3% the value of the property at the time of extension, it added.
Yiu had said that the renewal of leases and the rate of annual rent would depend on Hong Kong’s financial situation near 2047.
The department also said that “various factors will be considered on lease extension, including whether the land is required for a public purpose upon expiry, or whether serious lease breaches are found.”
Along with lawmaker-elect Eddie Chu, Yiu will meet with Development Secretary Paul Chan Mo-po and Transport and Housing secretary Anthony Cheung Bing-leung on Thursday. They are expected to talk about the Wang Chau development plan, which villagers have protested against, saying that there is a larger piece of uninhabited land nearby.