TNAG-0669-FCO40-818-Policy-on-housing-and-resettlement-in-Hong-Kong-1977 — Page 115

CONFIDENTIAL #2

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XCC(77)8

(d) the household's aggregate monthly income should not

exceed $3,500;

(e) detailed rules for disqualification will need to be

(f)

drawn to exclude, for instance, households who already own flats;

tenants of public housing estates who surrender their tenancies should be treated as a special category and should not be required to satisfy all the above criteria.

Methods of Assistance

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The Working Party has concluded that there are two ways of assisting eligible households towards becoming home owners. They concern, first, the treatment of the sale price of the flat (and rules for subsequent re-sale) and, second, the provision of loan finance on reason- able mortgage terms.

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Flats can be sold at open market value, at cost or below cost. Selling flats at open market value to purchasers in the income the Working Party has in mind is not practicable because the interest rates for mortgage finance underpinning such a sales policy would have to be unrealistically low. Furthermore, such a sales policy is at variance with the Government's practice of not making a commercial rate of return on its investment in public housing and with its intention to create a non- profit-making Home Ownership Scheme. To sell below cost would also be unacceptable. Not only would this lead to a depletion of the Home Ownership Fund (and thereby remove the advantages outlined in paragraph 8 above), but it would also be an unjustifiable and unnecessary subsidy for one section of the community at the expense of General Revenue. Accordingly, the Working Party has proposed that flats should be sold at cost properly and comprehensively defined and the Finance Committee has agreed to allocate funds on the basis of this sales policy. More specifically this means that the sale price will be made up of:

(a) expenditure on that part of the land premium and on building costs properly attributable to the flats;

(b) expenditure on Housing Authority charges (including the salaries and on-costs of the staff of the Housing Department working on the flats-for-sale programme in respect of design, marketing, sales and financial and accounting administration);

CONFIDENTIAL

機密