Ratepayers can expect drop from next year
Ratepayers can expect to pay '25 to 50 per cent' less from April next year following a revaluation of properties.
Financial Secretary Donald Tsang Yam-kuen said the Government had brought forward the revaluation by a year because of the market downturn.
'There has been a drastic drop in property and rental values since last October and the present rateable values, which are based on the levels from the last revaluation on July 1, 1996, no longer reflect the actual rentals,' he said.
The revaluation would be based on property rents last month, instead of July. Future reviews would be held annually instead of every three years.
Property surveyors expected rates to drop about 25 to 50 per cent.
Political parties generally welcomed the move, but pressed for a reduction in the rates charged, now set at 4.5 per cent of rent paid.
Forms will soon be sent out asking more than 200,000 households to declare the amount of rent paid last month.
Under the existing schedule, a revaluation would have been held next year, and rates based on revised values would not have been implemented until 2000.
'Ratepayers would consider they would have to pay an unreasonably high amount by that time,' Mr Tsang said.
He expected rates revenue would drop but said the move was worth it considering the economic situation.
Officials refused to predict the revaluation's impact on rates revenue. The rates percentage charge will be determined in the financial chief's Budget estimates in March.
Government rents, charged at three per cent of the land's rateable value and the rateable value of any property on it, will also be affected by the revaluation.
Rates increases resulting from the past five revaluations have ranged from 17 per cent in 1988 to a record high of 260 per cent in 1985.
Objections to revaluations ranged from 18,800 in 1994 to 99,500 in 1985. The administration received 38,000 objections last year although there was no revaluation.
There are 1.67 million ratepayers, 1.32 million in residential property - including 23,000 in public housing - and the rest in commercial properties.
Rates revenue in 1995-96 was $14.3 billion, compared with $11.6 billion in 1998-99, when there was a quarterly rebate. Government rent revenue for this year is estimated to be $4.2 billion.
A chartered surveyor, Pang Shiu-kee, expected rates payable on flats of about 700 square feet to drop by 25 to 50 per cent, depending on the location and quality.
'Flats in the New Territories would be affected most as the rents have decreased substantially due to a large supply of flats,' Mr Pang said. He said rates for commercial premises would decrease by 30 to 50 per cent.