An Discussion on Rent Concession

By Editor

Question

From Mr. Frank AU

Dear Tim,

We had a gathering with Adrew Wong on 10 Feb going over his questions one by one. As the meeting was arranged during office hours you are not duly informed and we would like to see what Andrew Wong wanted.

The fact that HYK is most concerned about question of the 3% government rent assessment for indigenous villagers' properties, which when the property is being "transacted" would disallow them form exercising the traditional right to be exempted. For example if the father divided the properties in a way of "gift" at a nominal fee of $1 dollar, or that the brothers divide the properties at some points among themselves the properties would become assessable properties. Andrew Wong was requested by HYK to look into this issue and present it to the government as a sort of open document to support the argument of HYK when the question needs to debate in the LegCo or other venues. He told me that he had already completed the main draft and the gathering was to fine tune some ideas which he might get confused.

I know that you have encountered quite such cases and in fact have had some thoughts about the problem, would you please help to look for that kind of documents of indeed views and ideas in these areas which could assist in supporting this type of "gift" and "lot division" are in sense transactional succession.

We are going to meet Adrew Wong on 20 Feb at the HYK in the morning, would you please express your point so that I can present to them.

Regards,

Frank

16.2.2006

Reply

From Timothy YUEN

Dear Frank,

According to the Government Rent (Assessment and Collection) Ordinance (Cap. 515) (the Ordinance) enacted in May 1997, it provides for the arrangements for the assessment and collection of Government rent after 30 June 1997.

Section 6 of Cap 515 stipulates that the lessee of a lease to which the Ordinance applies is liable to pay Government rent of an amount equal to 3% of the ratable value of the land leased. The applicable leases under Cap.515 include also those extended by the operation of the New Territories (Extension) Ordinance (Cap. 150). [The decision of a recent case on Adverse Possession, therefore would be significant in interpretation of the effect of the leases, though on another spectrum.]

Section 4 of Cap 515 sets out in detail the conditions under which exemption from the liability to pay Government rent may be granted. Such conditions have reflected Article 122 of the Basic Law and the relevant clauses of Annex III to the Joint Declaration.

In brief, where a rural holding or small house lot was held by an indigenous villager on 30 June 1984 and has since continued to be held by him or a person who is a lawful successor in his male line, the liability to pay Government rent in respect of the property (i.e. 3% of the ratable value) may be exempted and only the old rent needs to be paid. Moreover, any indigenous villager who was given a small house grant or respite house grant after 30 June 1984 may also be exempted from the liability to pay Government rent, provided that the interest in the property continues to be held by him or a person who is a lawful successor in his male line. Indigenous villagers can apply to the relevant District Lands Offices for the exemption from paying the new Government rent. Those who have not applied, or those whose applications were not approved, are required to pay the new Government rent.

On the questions raised:

(a) The father divided the properties and gave to his son as "gift"

l I cannot see if such form of transferring properties would satisfy the requirement of succession under Cap. 515. Should it be negative, no exemption can be considered.

(b) The brothers having succeeded from their father divided the lot among themselves.

l Again, it depends on whether such an act can meet the requirements of succession as defined by Cap. 515. If negative, no exemption can be considered.

Please consider:

1. Under Section 2 of Cap. 515, "lawful successor" means a person, male or female, who on the death of an indigenous villager is or becomes entitled to an interest in the estate of the deceased by lawful succession and which person is a descendant through the male line of the deceased.

2. Under the same, "lawful succession" means succession whether testate or intestate or in accordance with Chinese customary law operating in the NT and includes a succession on a succession.

Basing on the above, I am afraid, the answers to exemption on the above scenarios would be negative.

Best regards,

Timothy

17.2.2006