The Extension of Government Leases Ordinance came into force today, introducing a standing statutory mechanism that offers certainty on lease extension. The Lands Department will publish Extension Notice regularly to extend residential, commercial and industrial leases in batches for 50 years without charging additional land premium. The new mechanism removes doubts with regard to the “2047 deadline” and brings peace of mind to investors.

The Lands Department will publish an Extension Notice in the Government Gazette six years before the expiry of each batch of leases. The first notice was published today, covering 376 land lots with leases expiring in less than six years. All are extended.

As long as a lease is not specified on the Non-extension List, the lease will be extended without payment of additional land premium. Owners are only required to pay an annual government rent of 3% of the rateable value of the property.  The Government stated that the great majority of leases will be extended unless there are public interest considerations, such as ongoing serious lease breaches despite repeated warnings.

The encumbrances, interests and rights under the original lease will be carried forward unchanged to the extended lease term. Owners do not have to go through any procedures. This differs from the previous requirement for owners to execute lease extension documents with the Government individually, and to re-arrange mortgages etc. The new arrangement simplifies procedures and greatly benefits members of the public and businesses by saving time and costs.  Owners no longer need to worry about the uncertainty in relation to possible non-extension of the lease leading to property repossession or whether their mortgage terms can be extended beyond the year 2047.

The Government stressed that the ordinance upholds the land policy established in July 1997 and simplifies the lease extension arrangement. It added that the ordinance manifests the solid safeguards pledged to Hong Kong under the steadfast and successful implementation of "one country, two systems", and creates more favourable conditions for the city to pursue economic growth.

The Government will publish the next Extension Notice at the end of the year, covering leases expiring in 2031. The notice published at the end of next year will cover leases expiring in 2032, and so on.