ENG-1968 — Page 181

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LAND AND HOUSING

premium. This concession was given to assist bringing into use undeveloped industrial lots where the original purchaser no longer wished to develop the lot himself. The concession applies to any industrial lots acquired prior to January 1, 1967 and is to operate for a period of two years from July 18, 1968.

Sale by public auction ensures, by and large, that the person best able to develop the land in accordance with the terms of the lease gets the right to do so and that the community receives the maximum return in cash. As the rent reserved in the lease is low, this policy does not, generally speaking, enable the Government to obtain direct financial gain from any increase in the value of the land after it has been sold. For this reason the increase in land values in recent years has resulted in relatively little increase in recurrent revenue from land, since most of the Colony's more valuable land is held on long leases.

In the earlier part of this century the leases of lots lying in the better residential districts of Hong Kong Island and Kowloon often included restrictions on the type and height of buildings. These restrictions have served their purpose well but the demands of an increasing population now require more intensive development. It has now become the practice for these conditions to be modified in accordance with standard zoning schedules which preserve the amenities of each district while allowing more intensive develop- ment. Modifications of this sort are subject to the payment of a premium.

In recent years groups of 75-year non-renewable Crown leases granted in the Colony's early days, chiefly in Kowloon, have been expiring. Terms and conditions for new leases have already been agreed in a large number of cases. Premiums for the new leases may, subject to certain conditions, be paid either in a lump sum or by instalments over an agreed number of years, which is the method preferred by most lessees. Terms announced in 1960 provide for a maximum of 21 annual instalments and interest of 10 per cent.

In cases where a building in multiple ownership exists on the lot at the date of application for re-grant, payment by instalments can continue even if further sales of undivided shares should take place. Prior to the introduction of this concession the premium