bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

SCMP Reporter

HONG Kong's property developers are not the only group gushing black ink as a result of the territory's booming sales and rental market.

   The Government looks set to pick up a record $40 billion plus from the land premium for the fiscal year ending this week.

   But, perhaps surprisingly, the bulk of the money flowing into Government coffers has not come from the much-publicised land auctions.

   The Financial Secretary, Sir Hamish Macleod, made it clear in his March 2 Budget speech that property income was one of the main windfall areas of revenue.

   Final Government figures for revenue and expenditure will not be available until July.

  Figures gazetted recently, however, for the nine months to December 31 (the financial year ends on March 31) showed $28.13 billion earned from the land premium.

   That is more than three times the $8.6 billion earned in the same period of 1992 and already more than the original $24.28 billion budgeted by the Government for the full 1993-94 year.

   Together with interest earned on the funds already collected, the total was $28.34 billion.

   Figures also show that only $7.82 billion of the total land premium income came from land auctions.

    That is still up from the $5.11 billion earned from public auction and tender in the same period of 1992 and well on the way to surpassing the budgeted amount for the full year of $9.35 billion.

   The truly big winner for the Government, however, has been land premium income from other categories which receive far less publicity.

   Income from modifications of existing leases, exchanges and extensions totalled a huge $17.29 billion for the nine months to December 31. This is well over five times the $3 billion earned in the nine months of the 1992-93 fiscal year and close to double the amount budgeted for 1993-94 of $9.88 billion.

   Revenue from private treaty grants was also $3.02 billion, up from a mere $444.15 million in the corresponding period of the previous year.

   With three months of the year still to be completed at the December 31 balancing date, it is clear that total revenue from the land premium will be more than $40 billion.

   Since the end of 1993, the Government has held two land auctions and these have generated record amounts. Another auction is to be held this week which will further add to the income.

    At the same time, there would have been further income from private treaty grants, bringing in probably more than $5 billion for the whole year, and from modifications of existing leases, exchanges and extensions.

   This latter category could contribute well over $20 billion for the full year, making a total land premium income of something in excess of $41 billion. That would be more than 60 per cent up on the amount initially budgeted for.

   The Government's Capital Works Reserve Fund, which incorporates income from the land premium, takes into account all land transaction income except for instalments on transactions completed before the Joint Declaration.

    Under the Joint Declaration, the income from Government land transactions, after allowing for land production costs, is shared equally between the land premium account of the Hong Kong Government and the future SAR Government.

   The stake of the future SAR Government is held in the SAR Land Fund.

   In the nine months to December 31, the land premium income in the SAR Land Fund was some $8.73 billion.

   The difference between double that figure ($17.46 billion) and the total land premium income for the nine-month period would be the original cost of the land involved.



Figures reveal property windfall