Ask Mr. Know-It-All: How do I trade my "Ding” rights in Hong Kong?

Dear Mr. Know-It-All,
I understand that “Ding” rights are tradable in Hong Kong? Where are these activities happening? How do I get in on the action? – Ding Lei

 “Ding,” meaning “male,” rights derive from the 1972 Small House Policy, legislation that was put into place to help the villagers of the New Territories solve the housing crisis. It gave any male indigenous visitor ding kuen (丁權), the right to build a ding uk (丁屋), or small house, on certain areas of land, of a footprint no larger than 700 square feet and no more than three stories tall. While the policy did alleviate the housing crisis, it also led to the creation of many three-floor, 700-square-foot flats—prime rental properties in the NT.

Legally, you may not trade your inherent ding kuen to anyone. If you want to cash in, you must apply to the Lands Department for a Building License and a Certificate of Compliance, allowing you to construct the house. (You must also, by the way, sign a declaration saying that you do not intend to sell your rights to a developer.)

The building license has an “alienation restriction,” which bans you from transferring it to another party for a minimum of five years—unless, of course, you pay a premium which will remove that restriction.

Since 2002, the Lands Department has issued 10,888 Certificates of Compliance, and approved the removal of alienation restrictions in 5,181 instances, collecting $4.64 billion in premium fees within that period. In other words, roughly 50 percent of all ding uk licenses are sold within five years of being approved.

Who are they sold to? Take one guess. Usually, this is how it works: Developers buy desirable land in the New Territories, and indigenous villagers are “encouraged” to apply for the building licenses once the land has been placed in their name. When the license is granted, the villagers pay the premium to lift the alienation restriction and sell the land, and either the license or the completed ding uk, back to the developers. The whole process is known as tou ding (套丁).