XN000022-1996-06-13 — Page 6

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New arrangement for property resumption allowance endorsed

The Governor-in-Council has endorsed revisions to the eligibility criteria for the Home Purchase Allowance (HPA) to avoid over-generous payment to property owners affected by government resumption.

A government spokesman explained that HPA was an ex-gratia allowance payable to owners of domestic premises upon resumption by the Government on top of the full market value statutory compensation.

The original intention of the allowance is to ensure that affected owners will not be forced out of home ownership as a result of resumption. The allowance goes towards the cost of purchasing a replacement flat of a similar size in the neighbourhood of the resumed flat.

"HPA is currently paid to all owners of domestic premises regardless of whether the premises are vacant, let or occupied by the owners.

"Nor is there any restriction to prevent a single owner, who owns more than one property, from receiving more than one HPA payment.

"This is unjustifiably generous, particularly to absentee landlords or investment owners who have no genuine need to purchase a replacement flat to live in.

"Furthermore, it would give rise to speculators acquiring property for the purpose of profiting from HPA payment," the spokesman said,

To rectify this, the Governor-in-Council approved that HPA payment should normally be restricted to owner-occupiers on the basis of buying one replacement flat per owner.

"There will be guidelines for the Director of Lands to determine whether a claimant is an owner-occupier, and to address exceptional situations where payment to absentee landlords and multiple payments to an owner may be allowed," said the spokesman.

Owners who disagree with the Director of Lands' decision on their eligibility for HPA can appeal, within three months of such decision, to the Secretary for Planning, Environment and Lands.

The Finance Committee of the Legislative Council will be asked to endorse the arrangement shortly.

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