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The new Government rents to be charged are equivalent to 3 per cent of the rateable value of the land leased. In other words, they amount to approximately half of the rates currently being paid by property owners. Most of these Government rents will be payable only after 27 June 1997. We estimate about 950,000 properties will be affected. Out of these properties, approximately 60% are small residential flats (up to 70 square metre saleable area) for which the rents payable should generally be less than $200 per month. 6% are medium sized residential flats (70 square metre - 100 square metre) for which the average rent will be around $500 per month and 4% are large residential flats (100 square metre and over) for which the rent would average around $1,200 per month.
Certain properties will not have to pay the new Government rents. These are Housing Authority rented flats constructed on land vested in the Housing Authority; most properties on Hong Kong Island and Kowloon (south of Boundary Street); certain rural properties owned by indigenous villagers and tsos and tongs; and very low value properties such as small agricultural lots and ruined houses.
Mr President, this Council may wish to note that since the entry into force of the JD in May 1985, those non-renewable leases and those special purpose leases in the urban area that have been extended are already paying the new Government rents under the provisions in their lease documents. Most of the properties which will be required to pay the new Government rents are those whose leases will be extended to 30 June 2047 under the New Territories Leases (Extension) Ordinance. Although that Ordinance provides for the power to make regulations to govern the assessment and collection of the new Government rents, it only applies to leases in the New Territories and New Kowloon. It is therefore necessary to introduce new legislation to embrace all the affected leases. Indeed, from an administrative point of view, it is essential to adopt a uniform and standardised approach in assessing and collecting all the new Government rents.
The Bill is modelled largely after the Rating Ordinance. It seeks to codify and standardise the method of assessment, collection and payment of the new Government rents. Like rates, the new Government rents will be assessed on a tenement basis.
Under the Bill, landowners are primarily responsible for the payment of the new Government rents as lessees, but, for practical reasons, the Government has the power to demand the new Government rents from the ratepayer who, in most cases, is also the lessee. Where the ratepayer is not the lessee, the sum so paid shall be a debt due to the ratepayer by the lessee unless there is prior agreement otherwise.
The Commissioner of Rating and Valuation will assess and update the rateable value of the land leased in the same manner as provided for under the Rating Ordinance. Specific provisions have been incorporated for the assessment of the rateable values of those properties which are not liable for assessment to rates, e.g. agricultural land and land not yet developed or under redevelopment.
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