New Home Ownership Scheme 'too complicated'

The next government should review and simplify the New Home Ownership Scheme, making it less complicated for homeowners to plan resales of their homes, a Housing Authority committee was told yesterday.

A member of the Federation of Public Housing Estates, Man Yu-ming, urged the government - in a meeting of the committee on subsidised housing - to revive the old Home Ownership Scheme, which was shelved in 2003.

The new scheme - announced in Chief Executive Donald Tsang Yam-kuen's policy address in October last year - had introduced a complication to the subsidised housing programme that the older version did not have, said Man, an authority member and vice-chairman of the federation. It requires using a floating interest rate mechanism, which would make it difficult for homebuyers to calculate the best time to sell their properties to pocket a rise in the flat price, Man said.

'I call for the next chief executive, Leung Chun-ying, to consider dropping this new scheme and revive the old one,' Man said after the closed-door meeting.

Another committee member, Democratic lawmaker Wong Sing-chi, agreed that the old scheme should be restored. Under the old one, a flat owner had to pay a premium to the authority when reselling it, because the authority had sold it to them at a steep discount. If the discount was 30 per cent, the owner had to pay the authority 30 per cent of the prevailing selling price.

Under the new plan, the premium serves as a loan to the buyer, fixed at the time of purchase. The owner must repay that loan - plus an interest charge set with a floating rate that is lower than the average best lending rate of banks.