The difference on land premium assessments between the government and developers is caused by insufficient information flow and the complex pricing arrangement for new project sales, according to market players.
They said the suspension of land sales had also increased the difficulty in comparing values because of an absence of new transaction data.
A government official said the Lands Department was adopting a residual valuation method to assess the land value after the suspension of land sales.
'It means to use the selling price of property to minus the interest and construction costs to estimate the land value. Sometimes previously fetched prices on comparable land auctions will be counted,' the official said.
He said the selling price of property was based on transaction records in the Land Registry but secondary market transactions from estate agents would also be used as a reference.
The official admitted the government might not be able to achieve the most updated references since transaction records were usually obtained one month after deals were sealed.