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THE SINO-BRITISH JOINT DECLARATION ON THE FUTURE OF HONG KONG
for Hong Kong's continued participation in international agreements and organisations. Such consultation will be facilitated by the Sino-British Joint Liaison Group, whose role and functions are clearly defined in Annex II.
Annex III: Land Leases
53. This Annex takes account of the important part which land plays in the development and economy of Hong Kong.
54. It considers existing leases under two main categories: those which continue beyond 30 June 1997 and those which expire before that date. In the case of the first category (mainly 75 year leases renewable for 75 years, and 999 year leases) the rights in the leases are recognised by the Annex and will be recognised and protected under the law of the SAR after 1997. These rights include the right of renewal in the case of renewable leases, as well as rights granted by the leaseholder to other persons, e.g. sub-leases, mortgages and rights of way.
55. Leases which expire before 30 June 1997 (mainly New Territories leases and 75 year non-renewable leases in the urban area) may be extended without premium until 2047. A rent of 3 per cent of current rateable value will be charged from the date of extension, except in the case of village land held by indigenous villagers who will continue to pay a nominal rent.
56. New leases running until 2047 may be issued by the Hong Kong Government in the period up to 30 June 1997. These will continue to be issued under the existing system of land disposal (i.e. by public auction, tender or private treaty grant). A premium will be payable and a nominal rent will be charged up to 30 June 1997. After that date, no additional premium will be payable but the rent will increase to 3 per cent of current rateable value. 57. The concept of charging a rent on the basis of rateable values follows that used since 1973 to fix rents on the renewal of leases. It has, however, been agreed that the rent will be based on current rateable values (i.e. a rent which will change as rateable values change) rather than based, as at present, on a fixed reference point (i.e. a rent which is based on the rateable value at the date of renewal and which remains unchanged for the whole term of the lease).
58. The amount of new land which may be granted by the Hong Kong Government will be limited to 50 hectares a year. The limit does not include land granted to the Housing Authority for the construction of public rental housing.
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59. Modifications of lease conditions will continue to be dealt with by the Hong Kong Government in accordance with existing practice.
60. In recognition of the fact that leases which extend beyond June 1997 derive part of their value from the post-June 1997 portion of their term, the Annex provides for net premium income to be shared between the Hong Kong Government and the future SAR Government.
61. A Land Commission, consisting of an equal number of officials appointed by the British Government and the Chinese Government, will be set up. This Commission will monitor the implementation of the provisions in this Annex and will consider proposals for increasing the limit on the amount of new land which may be granted and for drawing on the SAR Government's share of premium income. It will not, however, consider individual land cases, nor will it be involved in deciding who should be issued with new leases. The Commission will be dissolved on 30 June 1997.