XN000022-1972-05-10 — Page 16

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Wednesday, May 10, 1972

Over 4,000 lots and sections of lots in New Kowloon alone would

fall due for renewal in 1973. These cover residential, commercial/residential

and industrial uses.

Mr. Szeto Wai estimated that probably 100,000 units in which hundreds

of thousands of people live would be affected by the renewal policy.

"In most cases the developers had made their profits and moved on

to bigger profits, leaving the small owner-occupier to face the devastating

re-assessed Crown rent."

The position of such a person was aggravated if he was still paying

for his property by means of instalment payments covering the capital cost

plus interest, he added.

He said it was more justifiable to reassess Crown rent as a proportion

of rateable value of the property which includes elements on the land and the

buildings on it.

Such a method was less arbitrary and more equitable compared with

the present policy, he stressed.

Its merits are:

1) Rating is a continuous and rational process; it will iron

out the volatility of the real estate market which is one of the objections to the present policy of re-assessment based on rising market land values.

2)

3)

Crown rent will be directly related to the income that can be derived from the land at the time of renewal and thus avoid hardship that would otherwise be created by unfairly re-assessed Crown rent which may exceed the existing rent roll.

Factors such as appreciation, enhancement of values due to economic development of locality, lease restrictions, rent control, etc. are reflected in rating and hence would also be reflected in the Crown rent.

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