Hong Kong to relax rules on leasing subsidised flats

The Hong Kong government will make it easier for owners of subsidised flats to lease their properties in September by waiving the land premium requirement.

The Housing Authority said in a statement on Thursday that it had approved a scheme allowing owners of subsidised sale flats to rent out their units without paying a land premium to the government.

The authority will launch the new scheme on a pilot basis with a quota of 3,000 flats.

According to the statement, the scheme will “make more effective use of existing housing resources, allow owners… to utilise their properties flexibly, and provide more rental options for citizens who are not eligible for Public Rental Housing but cannot afford to purchase private residential properties.”

Under the scheme, owners who have had their flats for 10 years or longer may lease their flats without paying the land premium to renters who meet household income and asset limits stipulated by the “White Form” eligibility criteria.

The land premium that owners are currently required to pay before they can lease their flats stands at around 30 per cent of the flat’s current market value.

At present, leasing subsidised flats without first paying the land premium constitutes a criminal offence.

Under the new scheme, owners will still have to pay the government a Letting Permit Fee.

Peace of mind

“Many owners have owned their [subsidised sale flats] for many years, and their housing needs may have become different due to changes in their family circumstances,” a Housing Authority spokesperson said.

The new scheme will allow owners to make more effective use of their flats while providing eligible renters with affordable housing options, they said.

Owners will have to apply for two certificates, each with a HK$400 application fee, before they can start leasing their flats.

Speaking to reporters after an event on Thursday, Stephen Cheung, chair of the authority’s Subsidised Housing Committee, said that the new plan would allow owners to rent out their flats with peace of mind and deter them from leasing their properties on the black market.