The Legislative Council passed the Extension of Government Leases Ordinance (the Ordinance) to simplify the renewal of land leases. The Secretary for Development, Bernadette Linn, said in a blog post today (July 7) that the simplified renewal arrangement embodies the solid safeguards to Hong Kong under the steadfast and successful implementation of "one country, two systems", and creates more favorable conditions for Hong Kong to pursue economic growth.
In her view, the government's clear stance on lease renewal will help maintain the confidence of owners and investors, facilitate business and create better conditions for the government to work hard for the economy, development and people's livelihood.
The Director of Lands will continue to exercise the sole discretion of the Government and extend the relevant land leases by publishing an "Extension Notice" in the Government Gazette six years before the expiry of each batch of applicable leases. The "Extension Notice" will specify that applicable leases that are due to expire in a specified period will be extended for 50 years without payment of additional premium but subject to payment of annual government rent equivalent to three percent of the rateable value of the relevant land as annually assessed, except those specified on the "Non-extension List" published on the same day. Through the "Extension Notice" under the new mechanism, the encumbrances, interests and rights under the original lease (such as mortgages) will be carried forward to the extended lease term without being affected. Owners do not have to perform any procedures, hence obviating the need for owners to undergo cumbersome procedures such as executing lease extension documents with the Government individually, re-arranging the mortgages, etc. as in the past.
Moreover, the Lands Department published the first "Extension Notice" on July 5, which covers applicable leases expiring in less than six years (i.e. leases expiring between July 5, 2024 and December 31, 2030) (Note). This batch of land leases are all extended. They involve 376 lots, including 309 situated in Kowloon mainly in Yau Tsim Mong district and 67 lots on Hong Kong Island.
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