ENG-1976 — Page 156

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Renewal of Crown Leases

HOUSING AND LAND

Since December 14, 1973, all renewable Crown leases which have expired are deemed to have been renewed on expiry under the Crown Leases Ordinance—except for certain leases in the New Territories which are renewed under the New Territories (Renewable Crown Leases) Ordinance without increase of Crown rent. Aside from the exceptions, the new Crown rent on renewal is an amount equal to three per cent of the rateable value of the property. In the case of a lot in flatted development, the owner of each flat in the building pays three per cent of the rateable value of his flat and is not concerned with the payment of the remainder of the new rent of the prop- erty. On redevelopment of the property, the new Crown rent is an amount equal to three per cent of the rateable value of the lot as redeveloped, provided this is higher than the previous old Crown rent. The total revenue from the collection of Crown rent during the financial year 1975-6 was $16 million.

Re-grant of Non-Renewable Crown Leases

When a non-renewable 75-year Crown lease is due to expire and the land is not required for public purposes, a new Crown lease for a similar term and on modern special conditions is normally granted to the existing Crown lessee at a premium which represents the full market value of the vacant land. Subject to certain provisions, the premium may be payable by up to 21 annual instalments with interest at 10 per cent per annum,

Where a property is in multiple ownership, a new Crown lease may be granted either by normal re-grant-in which case it is necessary for each and every owner collectively to agree the re-grant premium-or by means of a grant from the Crown to the Colonial Treasurer Incorporated. This method has been devised to cover cases where the owners are collectively unable to agree to the terms of the re-grant. On being granted a new Crown lease, the Colonial Treasurer Incorporated assigns the undivided shares among the respective former owners with the premium apportioned on a pro rata basis. If any owner does not accept the terms offered, the Colonial Treasurer Incorporated takes possession of the unit concerned with a view to selling the unit by public auction.

As a result of the statutory control of domestic rents and the sharp rise in land prices in 1972-3, domestic rental incomes have in most cases proved to be unable to cover the annual instalments of re-grant premium assessed on land value prevailing at the time of expiry of the original lease. The government therefore decided in Septem- ber 1975 that for a temporary period the actual annual amount payable would be approximately 70 per cent of the net annual income arising out of the property concerned. The normal re-grant premium instalment will become payable upon the expiration of this period, the duration of which will be reviewed in 1978.

Land Office

The issue, renewal, variation and termination of Crown leases is dealt with by the Land Office, which is a branch of the Registrar General's Department. Records of transactions relating to land on Hong Kong Island, in Kowloon, in New Kowloon