Hong Kong surveyors have hit out at new, higher compensation packages being considered by the Government for dislodged tenants. They claim the proposed increases could mean landlords will have to pay out up to half the value of their property in compensation and this will impede rather than encourage urban renewal. Legislators are currently considering different proposals that could triple the amount of compensation paid to tenants. Under present legislation a tenant is entitled to compensation equivalent to 1.7 times the rateable value of the property they live in. The rateable value of any property is supposed to be equivalent to the amount of money which a landlord could collect in one year in the current market. The present compensation package is therefore equivalent to about 20 months' rent. Legislator James To Kun-sun has proposed an amendment that would see the multiplier raised to five times the first $90,000 of rateable value. The remaining rateable value would be set at 1.7 times. The Government is keen to amend the current rate to a sliding scale, starting with a multiple of five on the first $30,000 in rateable value and sinking to as low as one for premises with rateable values in excess of $75,000. A third option advanced by the the Hong Kong Association of Democracy & People's Livelihood would increase the multiplier to a factor of seven for premises with a rateable value not exceeding $30,000. The multiplier would be reduced to five, three and one as the rateable value increased. The Hong Kong Institute of Surveyors (HKIS) and the Royal Institution of Chartered Surveyors (RICS) argue the higher compensation levels will penalise landlords and discourage redevelopment. HKIS president Leung Chun-ying said landlords could find themselves paying out as much as half of the value of their property to tenants as compensation if these new amendments found their way into the law books. 'That in our view would discourage redevelopment,' said Mr Leung. 'Hong Kong has been fortunate that it doesn't have the urban slums that there are in other cities because we have an efficient recycling process of older buildings.' Stephen Yip Moon-wah, a member of both surveying bodies, said he favoured a sliding scale scheme with a cut-off point for wealthier tenants. He said it was ludicrous that a tenant living on The Peak should get the same level of compensation as someone less well off. Mr Yip said it was unfair for tenants to get such huge payouts. 'Tenants who stay in the premises for just a short period of time or tenants who are financially sound will benefit from these 'windfall profits',' he said. WHAT THEY PROPOSE Government: Five times the flat's rateable value (RV) up to $30,000. Multiplier then reduces gradually as RV increases, to a minimum of one. Legislator James To: Five times RV on first $90,000. Multiplier then cut to 1.7 times RV on the remainder. Hong Kong Association of Democracy & People's Livelihood: Seven times RV up to $30,000. Multiplier gradually reduces to minimum of one as RV increases. HKIS and RICS: Sliding scale with special provisions for under-privileged groups.