Owners to pay 5pc less in rates as rents drop
Private home owners are expected to pay five per cent less in rates in the next financial year due to continuing falls in rent.
Those who own small or medium-sized flats are expected to pay even less because the rental value of such properties has fallen particularly sharply in the past year.
The news is likely to be announced by Financial Secretary Antony Leung Kam-chung in his maiden Budget speech on Wednesday. But such reductions would be offset if the current rate charge of five per cent of rateable value - equal to one year's rent - is increased in the Budget.
Lo Hing-chung, assistant director of the Rating and Valuation Department, said the latest assessment of rental values of Hong Kong's 2.7 million residential and commercial properties was almost complete.
He said results showed a general decrease in value, although he declined to provide detailed figures. However, the department's rental index for private residential properties in the SAR fell 5.08 per cent from 98.5 in October 2000 to 93.5 in October 2001. Commercial properties suffered a drop from 101.8 to 98, or 3.73 per cent.
The index was set at 100 in 1999. The month of October is used as the benchmark in the evaluation of rental value.
The index of small properties below 40 square metres (428 square feet) fell 6.01 per cent from 96.4 to 90.6, while those between 40 and 70 square metres (749 square feet) dropped 5.73 per cent from 97.7 to 92.1.
Medium apartments between 70 and 100 square metres (1,070 square feet) fell 5.52 per cent from 101.4 to 95.8. But apartments larger than 100 square metres fell only by 1.45 per cent from 103.3 to 101.8.
Owners on average currently pay $825 per quarter for a small flat, $1,872 for a medium flat and $4,614 for a large apartment.