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Vivian Au

A new law designed to automatically renew commercial, residential and industrial land leases scheduled to expire by 2047, the 50th year of the city’s return to Chinese rule, came into force on Friday.
The Extension of Government Leases Ordinance will cover the first group of leases, involving 376 parcels of land, which are scheduled to expire in less than six years.
And there are more than 300,000 commercial, residential and industrial land leases that will be automatically extended for another 50 years when they expire on June 30, 2047.
Here the Post examines the implications of the ordinance.
1. What kinds of land leases does Hong Kong have?
There are different leases in Hong Kong, including 75 years, 99 years and 999 years.
The 75-year land lease came from the initial practice of the former colonial government and the practice carried on after Kowloon on the south of Boundary Street was ceded to Britain in 1860.
Lease terms of 99 years started in 1898 in the New Territories and New Kowloon to the north of Boundary Street and the practice was later applied to other parts of Hong Kong.
Lease terms of 999 years are rare and only apply to some land on Hong Kong Island and in Kowloon.
2. Why do land leases need to be renewed?
Hong Kong’s 1997 land policy, excluding short-term tenancies and special purpose leases, rules that leases without a right of renewal can be extended at the sole discretion of the government for 50 years without any additional premium with an annual rent equivalent to 3 per cent of the prevailing rateable value of the property.
The new ordinance from July 5 will provide a new statutory mechanism for lease extension.
The expired leases will be automatically continued for another 50 years unless the holders opt out through a new statutory mechanism.

3. Why is it important to make it easier to renew leases?
Roden Tong Man-lung, the president of the Law Society, which represents solicitors, said the ordinance helped the daily life and business operations of the city.
“The ordinance brought clarity and certainty to the extension of government leases,” Tong added.
Edward Lau Kwok-fan, a lawmaker, said that the new arrangement would help to boost confidence of the business sector by giving clear guidance on the renewal of leases.
4. What are the conditions for renewed leases?
The leases under the new mechanism will be automatically extended for 50 years without the payment of an additional premium but will require an annual rent equivalent to 3 per cent of the rateable value of the property.
Leaseholders do not need to sign a new lease and they choose to opt out if they do not wish to renew.
5. When would a lease not be renewed?
Leases which involve significant public interest, including serious breaches of lease conditions might not be renewed, the Development Bureau said.
Hong Kong properties owned by foreign entities will require prior written approval for a lease extension from the Office of the Commissioner of China’s Ministry of Foreign Affairs in Hong Kong.
The properties involved are those owned by consular missions to the city and the representative offices of international organisations that enjoy privileges and immunities, and are used as chancelleries or residences for heads of missions and mission staff.


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Hong Kong economy

New law to extend Hong Kong government land leases is in force; the Post examines the process

The Kowloon Peninsula, where many of the government land leases covered by a new ordinance are located. Photo: Dickson Lee

New legislation designed to automatically extend commercial, residential and industrial leases on government land has come into force. Photo:  Elson Li

First batch of 376 Hong Kong land leases to be renewed beyond 2047 under new mechanism

Development minister Bernadette Linn says the move “creates more favourable conditions for Hong Kong to pursue economic growth”. Photo: Sun Yeung

Development chief Bernadette Linn has hailed the new ordinance’s role in simplifying lease renewal arrangements. Photo: Xiaomei Chen

Hong Kong’s renewal of land leases expiring by 2047 to boost confidence in city: experts

A village in Hong Kong’s Yuen Long. The Extension of Government Leases Bill would take effect via government gazette notices on Friday. Photo: Winson Wong

News

Hong Kong

Extension of Government Leases Ordinance designed to cope with more than 300,000 commercial, residential and industrial leases scheduled to expire in 2047


Extension of Government Leases Ordinance designed to cope with more than 300,000 commercial residential and industrial leases scheduled to expire in 2047.


Hong Kong property

Hong Kong housing

Hong Kong politics

Property policies

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Explainer

Explainer | New law to extend Hong Kong government land leases is in force; the Post examines the process

Extension of Government Leases Ordinance designed to cope with more than 300,000 commercial, residential and industrial leases scheduled to expire in 2047

1. What kinds of land leases does Hong Kong have?