Future HOS buyers may be charged interest

PUBLISHED : Friday, 28 October, 2011, 12:00am
UPDATED : Friday, 28 October, 2011, 12:00am


Future buyers under the resurrected Home Ownership Scheme may be charged interest on the subsidies they receive from the government.

This was the majority view that emerged in the Housing Authority, which met yesterday to discuss the housing scheme announced by Chief Executive Donald Tsang Yam-kuen in his policy address two weeks ago.

The revised programme is meant to sell 5,000 subsidised homes a year to lower-income people, starting in 2016. But critics have noted that its resale arrangement would allow owners to pay smaller premiums to the authority than were paid under the old scheme that ended in 2002.

Under the new policy, the premium - the difference between market price and discounted purchase price - to be paid by the owner to the authority on resale would be fixed at the time of purchase. If the market goes up by the time the flat is resold, the buyer can pocket most of the rise in market price after deducting the fixed premium.

Critics say this is too generous and unfair to existing HOS owners.

The interest rate idea is seen by some critics as a compromise by housing officials. Anthony Cheung Bing-leung, chairman of the authority's subsidised housing committee, said the interest charge would maintain the value of the purchase discount, regarded as a loan given by the authority, despite the impact over time of inflation. 'But we have not decided on this,' he said.

But committee member Wong Sing-chi said he was worried that the interest requirement may defeat the purpose of the new scheme, which is to allow buyers to make some money from the resale so they can buy a home in the private market. 'If the interest rate soars in later years, the interest that future buyers pay may be even higher than the rise in the flat price. It could be a big crisis.'