The Government's task of securing more land revenues through successful premium negotiations is being put to the test, with developers hesitating to commit to deals.
Given the moratorium of land disposals, successful settlements on premiums payable for property redevelopment or lease modifications form an essential part of raising revenue to help relieve the expected budget deficit.
The Lands Department has been in prolonged negotiations on land premiums as developers appeal for lower prices during the property downturn.
It recently made renewed offers in several appeal cases where the asking premiums had been adjusted downwards but developers appeared not to be satisfied.
An executive of a property company engaged in one appeal case said the property market was still volatile with transactions falling and sentiment softened.
He said that while the Government's offers were not exceptionally out of the line, developers remained cautious in committing to land premium payments because of the potential risks.
There was no compromise yet between the Government and developers, he said, adding that the disparity between asking and acceptable premiums was about 10 to 15 per cent.
