LCQ20: Stepping up efforts to motivate property owners to carry out building repairs
************************************************************************************
Question:
It has been reported that as at the end of 2024, there were over 29 000 private buildings in Hong Kong aged over 30 years, accounting for about 60 per cent of the total number of private buildings. However, as at March 2026, only about 3 800 buildings were granted subsidies under the Operation Building Bright 2.0 (OBB 2.0) implemented by the Urban Renewal Authority (URA). Since the launch of the OBB 2.0 in July 2018, construction costs have risen substantially, but the maximum subsidy level under the OBB 2.0 has not been adjusted. In this connection, will the Government inform this Council:
(1) as the Government announced in February 2026 that to reduce the risk of bid-rigging in building repair works, it would allocate $300 million to the URA to facilitate the launch of an enhanced version of "Smart Tender" and provide subsidies to property owners to utilise the paid services of "Smart Tender" to organise major building repair works, whether the Government will consider further increasing the level of concession for property owners utilising the paid services of "Smart Tender", and what measures have been put in place to enhance the confidence of property owners in the ability of the enhanced version of "Smart Tender" to effectively prevent bid-rigging;
(2) as the existing OBB 2.0 mainly assists property owners in organising inspection and repair works involving the common parts of their buildings in accordance with the requirements under the Mandatory Building Inspection Scheme, but property owners have to apply separately for the Fire Safety Improvement Works Subsidy Scheme to improve fire service facilities such as fire doors, fire-resisting construction and fire alarm systems, whether the Government will consider consolidating the two subsidy schemes and implementing a one-stop vetting and approval mechanism; and
(3) targeting the substantial increase in construction costs, whether the Government will establish an automatic adjustment mechanism linked to construction costs in respect of the maximum subsidy level under the OBB 2.0?
Reply:
President,
Proper maintenance of private properties is the primary responsibility of property owners. The Government recognises that some owners may find it difficult to fulfil their maintenance responsibilities due to a lack of financial means, technical knowledge, and/or organisational capacity. Therefore, since 2018, the Government has partnered with the Urban Renewal Authority (URA) to successively launch a number of building rehabilitation subsidy schemes, including the Operation Building Bright 2.0 (OBB 2.0), to provide financial and technical support to owners in need, assisting them in carrying out prescribed inspections and repair works under the Mandatory Building Inspection Scheme. To date, the Buildings Department has issued mandatory building inspection notices to approximately 9 000 buildings in accordance with the "risk-based" principle, and approximately 4 300 buildings have received or will receive subsidies under the OBB 2.0.
In respect of the various parts of the question, having consulted the Security Bureau, a reply is as follows:
(1) The Development Bureau, in collaboration with the URA, targets to launch the enhanced "Smart Tender" services in the fourth quarter of 2026 to strengthen support for owners' corporations and owners in engaging compliant consultants and contractors to properly carry out building maintenance works. The enhanced "Smart Tender" services include establishing more rigorous "pre-qualified lists" of consultants and contractors. In addition to considering criminal and disciplinary records alongside past performance, consultants and contractors must pass background checks by the Police and the Independent Commission Against Corruption before they can be included in the lists and to participate in tenders. Furthermore, the URA will be the gatekeeper and conduct tendering and tender evaluation for owners in engaging consultants and contractors. For buildings applying for government maintenance subsidies, after commencement of works, the URA will require consultants and contractors to report to the URA when there are significant variations to the scope of works or increase in project costs, so that the URA may offer independent advice to owners.
In this year's Budget, the Government announced the allocation of a total of $300 million to the URA, among which $100 million is the initial capital for the URA to establish a subsidiary company dedicated to providing the enhanced "Smart Tender" services and ensure the subsidiary has sufficient initial capital to launch the new service. The remaining $200 million is allocated to provide fee concessions for owners using the enhanced "Smart Tender" services.
Since 2017, the Government has subsidised owners to use the "Smart Tender" services, with subsidy rates ranging from 50 per cent to 95 per cent. The fees will increase as the scope of service of the enhanced "Smart Tender" will be significantly expanded. Even with government subsidies, owners may have to pay higher fees in the future than before. We are reviewing how to make the best use of the aforementioned $200 million and the remaining balance of the subsidy scheme to encourage more owners to participate in the enhanced "Smart Tender" services, including focusing resources on owners in need (such as prioritising subsidies for owners of buildings with lower rateable values) and ensuring the sustainability of government subsidies.
The Development Bureau is working out the details of the enhanced "Smart Tender" services with the URA, including the estimated service fees and subsidies for providing concessionary fees to owners. We will report the detailed proposed measures and implementation details to the Panel on Development of the Legislative Council in the middle of this year in striving to launch the enhanced services in the fourth quarter.
(2) The OBB 2.0 and the Fire Safety Improvement Works Subsidy Scheme (FSWS) are two subsidy schemes with different objectives. The OBB 2.0 aims to assist owners of old buildings in need to comply with the Mandatory Building Inspection Scheme related regulations under the Buildings Ordinance (Cap. 123), covering inspections and repair works including (i) elements related to building design, i.e. external elements (such as external walls and fences); (ii) structural elements (such as columns, slabs and beams); (iii) drainage systems and (iv) fire safety elements (such as means of escape, means of access for firefighting and rescue, and fire resisting construction), including replacement of damaged fire safety doors.
The FSWS aims to subsidise owners of old buildings to carry out fire safety improvement works, thereby assisting them in complying with the requirements of the Fire Safety (Buildings) Ordinance (Cap. 572) (FS(B)O). A building participating in the FSWS must meet several criteria, including that the building is a target composite building under the FS(B)O, and has received a Fire Safety Direction (Direction) issued by the Fire Services Department and the Buildings Department regarding its common areas. The subsidy is applicable to fire safety improvement works carried out at the common parts of the building required for complying with the Directions, including (i) works to provide or improve fire service installations and equipment, such as automatic sprinkler systems, manual fire alarm systems, fire hydrant and hose reel systems; and (ii) works to improve fire safety construction, such as improving fire resisting construction.
If a building is eligible for both of the above subsidy schemes, applicants may apply for both schemes simultaneously as needed. In fact, most buildings issued with mandatory building inspection notices have also been issued with Directions. Therefore, the URA has established procedures to handle applications in a unified manner, including aligning the application deadlines for both schemes, adopting a "single form for multiple applications" arrangement, and jointly reviewing and approving cases where applications for the OBB 2.0 and the FSWS are submitted simultaneously. We believe that the current approach not only maintains the different policy objectives of the two schemes but also enhances the administrative co-ordination and facilitates the application process, thereby benefiting owners in need.
(3) Since its launch in 2018, the OBB 2.0 has nearly exhausted its $6 billion subsidy allocation. Approximately 4 300 buildings are projected to benefit, involving about 280 000 households. The OBB 2.0 aims to subsidise owner-occupiers of residential and composite buildings who are in greater financial need in carrying out inspections and repairs under the Mandatory Building Inspection Scheme. This includes buildings aged between 30 and 39 years that have received a mandatory building inspection notice, as well as buildings aged 40 years or older that have received a mandatory building inspection notice or are voluntarily undergoing inspections and repairs under the Mandatory Building Inspection Scheme. The average annual rateable value of residential units in the aforementioned buildings must not exceed the prescribed ceiling (Note).
There is broad consensus that the OBB 2.0 helps support owners in carrying out major building maintenance works. Owners' continued commitment to proper building maintenance will effectively extend the lifespan of buildings and alleviate pressure for redevelopment. The Government believes it is worthwhile to continue providing subsidies to owners in need, and therefore announced in this year's Budget that $3 billion has been set aside for this purpose.
To ensure that this $3 billion of public funds will be utilised more effectively and to subsidise target buildings in need more precisely, the Government is conducting a comprehensive review of the OBB 2.0 in terms of its implementation experience, analysing the relevant data, and drawing up a new subsidy scheme. We intend for the URA to first roll out the enhanced version of "Smart Tender" services in the fourth quarter of 2026, process applications which have yet to enter the tendering process under the OBB 2.0, and then introduce the new subsidy scheme after the enhanced "Smart Tender" has been operating for some time. Under this approach, we will complete the review of the OBB 2.0 and work out the details of the new subsidy scheme (including the maximum subsidy amount) in early 2027. We will launch the new subsidy scheme after consulting the Panel on Development of the Legislative Council and seeking funding approval from the Finance Committee.
Note: The specified caps are $187,000 for units in urban areas (including Sha Tin, Kwai Tsing, and Tsuen Wan) and $143,000 for units in the New Territories.
Ends/Wednesday, May 27, 2026
Issued at HKT 16:33
Issued at HKT 16:33
NNNN