The government fended off criticism yesterday of apparent loopholes in the tender terms for the first two housing sites in the "Hong Kong Property for Hong Kong People" scheme that could allow non-locals to buy the flats.
On Tuesday, the Lands Department announced two sites in Kai Tak will be up for tender under the scheme, which requires homes built on them to be sold only to Hongkongers. Surveyors said the terms of the scheme did not prohibit a non-permanent resident from buying a flat through a trust or authorising a permanent resident to buy one as a proxy. There was also concern that buyers of second-hand homes are not required to make a statutory declaration of their status as Hong Kong permanent residents.
But the Lands Department announced yesterday that every buyer of a flat under the scheme within 30 years must obtain the consent of the director of the department.
One of the conditions for gaining consent is that the buyer must make a statutory declaration of permanent resident status. The declaration has to be registered in the Land Registry.
Also, the buyer must buy the flat in his or her own name.
Any buyer who attempted to breach the regulations might be prosecuted under the Crimes Ordinance and could be fined and jailed for up to two years.
The government could also confiscate the flat.
Chief Executive Leung Chun-ying said yesterday in Beijing he was confident that the terms of the tender document set out by the Development Bureau would enable the scheme to meet the government's purpose - which is to help permanent residents become homeowners.
Lawmaker James To Kun-sun, a solicitor, said the scheme could keep some mainlanders out of the market.
"The terms of the leases have increased the investment risk of mainlanders who want to buy the flats," To said.
"But some mainlanders might still be willing to take the risk and appoint Hong Kong residents to buy the flats [illegally] for them."
It would be a private agreement between two parties and difficult to uncover, he said.
Abraham Razack, the legislator for the property and construction sector, is concerned about the effectiveness of the scheme in achieving its purpose.
"The government is trying to control housing demand with this scheme, as it failed to control the housing supply. But this is not the way to control demand," he said. The two residential sites in Kai Tak will be put up for tender on March 28, and tendering will close on May 31.