The Extension of Government Leases Ordinance will come into force tomorrow, ensuring that the significant number of land leases expiring in upcoming years will be handled efficiently.

The ordinance provides a standing statutory mechanism for handling lease extension matters for general purposes leases, ie general residential, commercial, and industrial leases, which do not contain a right of renewal and expire on or after July 5, 2024 in batches.

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 3% 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 will publish the first Extension Notice tomorrow, which covers applicable leases expiring in less than six years, ie leases expiring between July 5, 2024 and December 31, 2030. 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.

In accordance with the requirement under the ordinance to give six years' prior notice, the department will publish the next Extension Notice at the end of 2024, which will cover land leases expiring in 2031.

As the Government has reiterated in the past, in general, applicable leases will be extended by the Government, unless there are public interest considerations against extension of any particular lease.

Secretary for Development Bernadette Linn said that the ordinance upholds the land policy made in July 1997 and simplifies the arrangement for extension of land leases.

“This manifests the solid safeguards to Hong Kong under the steadfast and successful implementation of 'one country, two systems', and creates more favourable conditions for Hong Kong to pursue economic growth.

“The arrangement of extending land leases without having to execute a new contract ensures that the significant number of land leases expiring in upcoming years will be handled in an efficient and orderly manner, as well as saves the time and costs of owners bringing tremendous convenience to the public and businesses.”

The Development Bureau has disseminated information on the ordinance to relevant professional organisations and offices of the Hong Kong Special Administrative Region Government overseas and in the Mainland to facilitate stepping up the promotion of the new mechanism to various stakeholders in the land and property market, including owners, the banking sector, estate agents, investors, etc.

The dedicated webpage and enquiry hotline of the department will commence operation tomorrow.