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What happens at the end of land lease term?

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  1. #1

    Join Date
    Jan 2016
    Posts
    63

    What happens at the end of land lease term?

    Hi,
    i am in the final stage of buying a flat in an old building.
    But i noticed that the commencement of lease term is 01 Jan 1898 and lease term is 150 years.

    this means land lease will end at 2047.
    agent said this is common for “second hand properties” which I am not sure of.

    Does anyone know what happens at the end of lease term? I don’t want to spend millions to have my flag forfeited after 27 years.

    thanks!


  2. #2

    Join Date
    Feb 2019
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    576

    Anything else big you can think of happening in 2047?


  3. #3

    Join Date
    Nov 2005
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    Cramped island
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    Nobody knows what will happen. Everyone assumes the government will extend the land lease for a nominal fee or something...
    That said, if the cost to extend is too high everyone will be out there fighting and protesting so chances of simple extension is high...

    The reason its set to 2047 is because that's the end of the 50years of 1C2S from 1997.

    shri, spode and simpsjk like this.

  4. #4

    Join Date
    Jan 2016
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    63

    haha of course I am aware of the uncertainty when HK is officially and fully returned to China...


  5. #5

    Join Date
    Dec 2018
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    1,235

    There are already land leases which go beyond 2047 (I own one such property) and, to date, the HKSAR Govt has made a practice of renewing expired leases for non-renewable terms of 50 years even if that pushes beyond 2047. However the sample size is small (I think).

    There's a good summary in the linked Legco webpage. Key points:

    1. it's at the government's absolute discretion but they have exercised it in at least some cases and no fees have been charged when they have done so. (Just my opinion of course, but I seriously doubt that the HKSAR govt would do that without the blessing of Beijing)

    2. as far as I am aware they have not made it a matter of policy to automatically renew all leases BUT

    3. I'm not aware of any cases where the government has not granted a 50 year renewal on expiry – if there are any, I would very much like to know.

    4. as far as 2047 is concerned, Article 5 of the Basic Law provides that "The socialist system and policies shall not be practised in the Hong Kong Special Administrative Region, and the previous capitalist system and way of life shall remain unchanged for 50 years". It does not automatically come to an end then but the PRC government has the right/power to decide what happens.

    https://www.legco.gov.hk/research-pu...-hong-kong.htm


  6. #6

    Join Date
    Dec 2018
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    1,235
    Quote Originally Posted by GentleGeorge:
    Anything else big you can think of happening in 2047?
    We get to celebrate the 100th anniversary of the Roswell Incident?
    GentleGeorge likes this.

  7. #7

    Join Date
    Jul 2004
    Posts
    3,601
    i am in the final stage of buying a flat in an old building.
    If you are looking far ahead till lease term end, i would rather worry about debilitating state of the old building than land lease its built on.. Regarding lease, its anyone's guess, imagine how much control CCP will take over between now and 2047 so no point worrying or guessing anything about it..
    shri likes this.

  8. #8

    Join Date
    Dec 2002
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    That and factor in the number of ccp leaders and local billionaire grade tycoons + local property companies who own property in HK... Including your own estate and it's developer.

    No point planning for an extinction level event.

    rkenia852 likes this.

  9. #9

    Join Date
    Jul 2011
    Posts
    1,560

    2047 means that whatever the HK government says can be deleted by Beijing at any time. Until Xi turns up and says he is a leader above Deng and that 1C2S will be extended for another 50/100/1000 years (with what we know will be its salami sliced removal in practice) you are at risk. Already 30 year HK mortgages extend beyond 2047.

    For investment planning, safest to assume your asset will be worth $0 in 2047 or take a bet on the CCP not lasting as long as 1C2S. The HK government's statistics department is showing that the HK population will drop from 2042 onwards, make of that what you will.