TNAG-0809-FCO40-1014-Legislation-for-Crown-lands-in-Hong-Kong-1978 — Page 168

HONG KONG

LEGAL REPORT

Enclosure No. 2

THE CROWN LEASES (AMENDMENT)

ORDINANCE 1978

(No. 56 of 1978)

Section 9 of the Crown Leases Ordinance, Cap. 40 provides that the basis of assessment for the new Crown rent payable under a renewed Crown lease shall be 3% of the rateable value.

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), it was discovered that the Ordinance, as it stood, appeared to allow for the reduction of the new Crown rent if the rateable value upon an interim valuation is for some reason reduced for example, because of a change in the user as distinct from a redevelopment.

3. The intention, at the time of enactment of the principal Ordinance, was 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 principal Ordinance which contemplates only an increase on interim valuations.

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 values 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by substituting the interim valuations for the existing rateable values or previous interim valuations which they superseded.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 the former section 9(3), which incorporated the relevant provisions, had been implemented in this way, it could have been 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latter category to be added to the aggregate instead of being substituted for the rateable values or interim valuations superseded.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 was felt desirable, therefore, that the scope for such an interpretation be removed.