Land premiums expected to boost coffers by $31.9b
The government is expected to pocket $31.9 billion from land premiums next year, further improving its financial situation.
Based on the budget forecast, the administration is able to add to the public coffers an estimated $51 billion from land sales, sale of student loans and investment income from reserves.
Officials said yesterday the total estimated land premium would rise slightly from $31.1 billion in 2004-05 to $31.9 billion in 2005-06, reflecting the rebound in the property market.
Land sales from auction and tender will contribute an estimated $21.1 billion, representing an increase of $400 million from $20.7 billion.
Earlier, the government released a new land list including valuable plots on The Peak and North Point that might fetch billions of dollars.
Officials generally expected land sales to continue to perform better than they had previously estimated.
The proceeds from private treaty grants - land that is sold directly rather than through auction - are expected to increase six times, from $784 million to $5 billion this year.
Officials refused to say if this reflected possible proceeds from the West Kowloon cultural hub project, stressing that they were revenue from items being discussed between developers and the Lands Department.
The rest of the land premiums, amounting to $581 million, were mainly made up from modifications to land leases, land exchanges or extensions.
The government is going to gain an extra $5 billion from the scheduled sale of student loans this year.
Officials revealed that there was at least one buyer expressing interest in buying the loans. A public tender is expected to be issued this year.
However, it was still uncertain whether the loan scheme would be outsourced or if it might affect students' repayment schemes.
The government will also continue to benefit from investment income from the foreign exchange reserve, which is expected to bring in $14.1 billion.
It is expected the rate of return will reach about 5 per cent. Last year, the reserve generated a return of $14.6 billion, $2.3 billion higher than estimated.
