LCQ20: Extension of land leases
It has been reported that some members of the public are worried that the "2047 time limit" for land leases is looming, and by then land leases may not be automatically extended or the relevant extension procedures may be complex. On the other hand, the Government indicated on November 27, 2019 that a large number of land leases would expire on June 30, 2047, and it was expected that the Lands Department's exercise of compiling the relevant information would be completed in phases from 2021 onwards. Subsequently on April 28, 2021, the Government indicated that such exercise would be completed in phases from 2021 to end of 2022. In this connection, will the Government inform this Council:
(1) of the detailed timetable for the aforesaid exercise of compiling information on land leases (including the respective expected completion dates for the various phases) and the latest progress, and whether it expects such exercise can be completed by the end of 2022 as scheduled;
(2) of the number of land leases expiring on or before June 30, 2047; and
(3) given that 2047 is only 25 years away from now, and the Government has to handle the issues of extension of a large number of land leases, of the outcome of the Government's exploratory work on streamlining lease extension procedures, and what streamlined procedures will be implemented?
The Government has clear and unequivocal policy for handling matters related to the extension of expiring land leases all along.
According to Article 123 of the Basic Law, where leases of land without a right of renewal expire after the establishment of the Hong Kong Special Administrative Region (HKSAR), they shall be dealt with in accordance with laws and policies formulated by the Region on its own. According to the policy statement promulgated by the HKSAR Government in July 1997, leases not containing a right of renewal (excluding short term tenancies and special purpose leases) may, upon expiry and at the sole discretion of the Government, be extended for a term of 50 years without payment of an additional premium, but an annual rent shall be charged equivalent to three per cent of the rateable value of the property, adjusted in step with any changes in rateable value thereafter.
Since the establishment of the HKSAR, the Lands Department (LandsD) has been dealing with matters related to the extension of expiring land leases in accordance with the aforementioned policy. Leaving aside leases granted for special purposes on policy considerations, most expiring leases not containing a right of renewal have been extended. In other words, the year of 2047 has never been a "time limit" in the realm of land administration.
My reply to the three-part question is as follows:
(1) and (2) Based on current statistics, there are about 2 400 lots (on sub-divided lot basis) for general commercial/residential/industrial uses with their land leases expiring from now to June 29, 2047. Among them, the earliest batch of expiring leases involving about 50 lots (on sub-divided lot basis) will expire in 2025.
As for large volume of land leases expiring on the day of June 30, 2047, the LandsD is continuing the compilation of relevant information. The exercise has been progressing well and is expected to be completed by the end of this year as scheduled.
(3) Under the existing practice, where extension of a land lease is approved, the LandsD will complete the necessary procedures and execute relevant instruments with the owner(s) through appropriate means. For land under single ownership, or multiple ownership with all owners unanimously agreeing to the lease extension arrangement, the LandsD would generally execute a lease extension document with all owner(s) jointly. For land under multiple ownership but owners not unanimously agreeing on or having difficulties in unanimously agreeing on the arrangement for lease extension (such as residential buildings with units alienated individually), after the expiry of the current lease, the Government will grant a new lease to the Financial Secretary Incorporated, which will then assign the undivided shares of the individual properties to their relevant registered owners. This arrangement ensures that even if individual owners do not agree with or cannot execute the lease extension arrangement, the interests of other owners who are ready to accept the extension and complete the assignment procedures will not be affected.
As the procedures of the aforesaid mechanism are relatively complex (in particular for lots involving more multiple ownerships), the Government is exploring whether there are other suitable arrangements under which the extension of land leases could be effected through streamlined procedures and more convenient means, including exploring the possibility of reducing the formalities needed from the owners through legislation while preserving the legal effect of the relevant lease if approved for extension. As mentioned above, for land leases for general commercial/residential/industrial uses, the next batch of expiring leases will expire in 2025 the earliest. The Government will come up with a proposal and communicate with the stakeholders at an appropriate juncture before then.
Ends/Wednesday, June 15, 2022
Issued at HKT 15:00
Issued at HKT 15:00