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HONG KONG URBAN COUNCIL
Government would take active steps to curb flat speculation, and I still stick to what I said then.
Apart from speculation, another factor originally envisaged as having a positive effect on cooling down the overheated construction industry has inadvertently burdened the genuine home-owner, that is high interest rates. In order not to make export industries which are essential to our economy suffer, banks offer preferential interest rates, but it is difficult for a bank to distinguish between the genuine flat-owner and short-term speculator, otherwise one might be tempted to suggest preferential treatment for home-buyers as well.
Instead, I think there is a case for Government to allow tax relief on interest paid on mortgages. In order to achieve the objective of easing the burden on genuine home-owners, and encouraging genuine home-ownership, I suggest certain criteria of eligibility, namely: the flat must be a completed residential flat with occupation permit; the tax-payer and his family must actually be dwelling in the flat themselves and not letting it out to collect rent; the ownership must be in the tax-payer's own name; and the tax allowance should be limited to one flat per tax-paying family, the definition of tax-paying family being man and wife with dependant children.
The taxation system in Hong Kong at the moment has a dependant children's allowance and a dependant parent's allowance, both of which seem to fulfill a social need more than a financial need, namely to encourage the proper upbringing of our children and to encourage care of the elderly within the family. The social aspect of a mortgage allowance is that the more people are able to own the roof over their own head, the greater the chance of instilling a sense of belonging and commitment to Hong Kong - surely this is a social need worth fulfilling?
With these remarks, Sir, I support the motion.
MISS MARIA W. C. TAM (in English):- Mr. Chairman, while extended rent control legislations are being introduced at the Legislative Council, property developers are voicing their objections at the UMELCO Office over the contents of this Landlord and Tenant (Consolidation) (Amendment) Bill.
Just in case anyone should have any doubts about the need of extending rent control to the 'unprotected' premises, may I quote some statistics for their information:-
I. HOUSING TYPE IN HONG KONG
(a) Public Housing - 422,000 units
(b) Private Housing - 441,000 units
(i) of which under Owner Occupancy - 230,000 units
(ii) under rent-control - 159,000 units
(iii) not under rent-control - 43,000 units (Re: Mr. Alan Scott, The Secretary of Housing, 14.11.1979)
Total: 863,000 units
II RENT AND HOUSEHOLD INCOME
(a) Distribution of Household Income
Household Income ($) % of Domestic Households Accumulative % Less than 499 4.0 4.0 500 - 799 2.3 6.3 800 - 999 2.7 9.0 1,000 - 1,199 3.9 12.9 1,200 - 1,499 6.1 19.0 1,500 - 1,999 15.0 34.0 2,000 - 2,499 16.0 50.0 2,500 - 2,999 12.0 62.0 3,000 - 3,499 9.0 71.0 3,500 - 3,999 6.0 77.0 4,000 - 4,499 5.5 82.5 4,500 - 4,999 6.0 88.5 5,000 - 5,499 3.5 92.0 5,500 - 5,999 1.0 93.0 6,000 - 6,999 3.6 96.6 7,000 - 7,499 1.7 98.3 7,500 or Above 1.7 100.0Source: Labour Force Survey on March 1979, Census and Statistics Department with adjustment in the underreporting factor
(b) Domestic Rentals Index and Consumer Price Indices in the past 4 years
Average size (sq.m.) 1975 1976 1977 1978 Small Flats (A) 34.1 100.0 107.1 132.7 149.7 Small Flats (B) 45.0 100.0 94.0 106.8 136.0 Medium Flats 122.1 100.0 109.5 129.8 150.0 Large Flats 211.3 100.0 115.6 116.2 156.0 CPI (A) 107.5 111.2 117.7 124.7 CPI (B) 107.5 111.8 117.9 124.9 Hang Seng 105.3 109.7 115.3 121.8(c) Rent Situation in The Third Quarter of 1979
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