TNAG-0809-FCO40-1014-Legislation-for-Crown-lands-in-Hong-Kong-1978 — Page 1

on 4th April 1978

IN EX

- 1 APR 1973

FA

MEMORANDUM FOR EXECUTIVE COUNCIL

CROWN LEASES (AMENDMENT) BILL 1978

A

On 19th June 1973, having considered memorandum XCC(73)53 (a copy of which is at Annex A) Honourable Members advised and the Governor ordered, inter alia, that a revised method of assessment for the renewal or renewable Crown leases be intro- duced and that the basis of assessment be 3% of the rateable value. The new method of assessment is applicable to Crown rent payable under leases renewed under the Crown Leases Ordinance (Chapter 40) enacted on 14th December 1973.

C.S. 166

of 80

2

In the course of compiling new Crown rent returns for renewable leases, based on 3% of the interim rating valuations made after the relevant day (the renewal date), the Director of Lands and Survey discovered that the Ordinance, as it stands, appears to allow for the reduction of new Crown rent if the rateable value upon an interim valuation is, for some reason, reduced, e. g. because of a change in the user as distinct from a redevelopment.

3

The intention, at the time of enactment, was, however, that, after statutory renewal, new Crown rent should be either 3% of the rateable value on the relevant day or 3% of the interim valuation on redevelopment whichever was the higher. This should permit the new Crown rent to increase upon redevelopment, but never to fall below 3% of the rateable value on the relevant day. This principle is clearly reflected in section 10 of the Ordinance which contemplates only an increase on interim valuation.

4

The revised method of assessment was intended to deal with interim valuations by adding them to the aggregate rateable value of the lot or section if they were in respect of tenements that had no existing rateable value or previous interim valuations; and, if the tenements had existing rateable values or previous interim valuations, by substituting the interim valuations for the existing rateable values or previous interim valuations which they superseded. While section 9(3), which incorporates the relevant provisions, has been implemented in this way, it can be construed as requiring in certain cases interim valuations which fall into the latter category to be added to the aggregate instead of being substituted for the rateable values or interim valuations superseded. It is desirable that the scope for such an interpretation be removed. Clause 2(b) of the Crown Leases (Amendment) Bill 1978

CONFIDENTIAL