(Q2) : Increasing the Government revenue from land premium
MR CHAN CHUN-YING:
Thank you, President. The main reply has mentioned that consideration will be given to allowing land owners to voluntarily surrender land planned to be resumed by the Government to deduct or offset the premium payable by those owners for in-situ land exchange or large-scale land disposal in new development areas, thereby enhancing development incentives. I have suggested that land bonds should be issued instead, which land owners could use to bid for government land. These bonds could also be traded in the secondary market, providing greater flexibility for land owners.
May I ask whether the Government will consider adopting this more flexible approach to resuming the land in question? Thank you.
SECRETARY FOR DEVELOPMENT:
Thank you, President. Issuing bonds for land resumption would be a rather significant change. We have no plans to adopt this approach at present. What kinds of arrangements are we exploring? If a developer is a land owner holding land planned to be resumed by the Government in NM, we have to pay compensation. If it so happens that the developer is carrying out redevelopment in neighbouring areas by way of in-situ land exchange or large-scale land disposal and needs to pay a premium to the Government, we propose adopting an offsetting approach, which is simpler for both the developer and the Government in terms of cash flow and administrative procedures. I believe this would be attractive to developers. Since announcing this measure, I have been aware of a positive market response. Thank you, President.