Rates and Government Rent

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  1. #1

    Join Date
    Aug 2009
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    Rates and Government Rent

    The Ratings and Valuation Department calculate the "Rateable Value (RV)" for your property, each financial year, once a year.

    What factors affect the rateable value of a property? How to make a request to Rating and Valuation Department (RVD) for review of the rateable value?

    "Rateable value is an estimate of the annual rental value of the property at a designated valuation reference date (generally on 1 October of the previous year, e.g. For the 2010-2011 rateable value, the designated reference date is 1 October 2009), assuming that the property was then vacant and to let. When assessing the rateable value, all factors which affect the rental value of the property are considered, such as -

    •open market rents around the valuation reference date, for similar properties in the locality;
    •age;
    •size;
    •location;
    •floor;
    •direction;
    •transport facilities;
    •amenities;
    •quality of finishes;
    •building maintenance & repair;
    •property management, etc."

    In practice: how accurate a reflection is the RV to the "market rate" of rental value that could be achieved on the same property?

    I.e. is the RV a useful indicator of the realistic "market rate" at which the property would rent out? Or a disconnected metric (e.g. in the UK, council tax is assessed in "bands" and properties were placed in "bands" many years ago and rarely re-assessed; although clearly the RV approach is re-calculating annually in the HKSAR).

    Thoughts welcome. Many thanks


  2. #2

    Join Date
    Mar 2016
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    23

    No need to pay ONE of them if the property is located south of Boundary Street in Kowloon and on HK Island.


  3. #3

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    Jan 2008
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    Quote Originally Posted by hgcsc:
    No need to pay ONE of them if the property is located south of Boundary Street in Kowloon and on HK Island.
    Not true: If the land lease expires, then the Government charges you rent to renew the lease. No 7 Conduit Road, Mid Level, the original lease expired in 1992. New lease was granted. Every quarter combined rent and rates bill is issued.

  4. #4

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    Quote Originally Posted by Oldtimer:
    Not true: If the land lease expires, then the Government charges you rent to renew the lease. No 7 Conduit Road, Mid Level, the original lease expired in 1992. New lease was granted. Every quarter combined rent and rates bill is issued.
    According to a publication by the RV Department:

    The Government rent referred to in this pamphlet is the Government
    rent payable under the Government Rent (Assessment and Collection)
    Ordinance (Cap. 515), which applies to the following types of land leases:
    (a) land leases in the New Territories and New Kowloon (north of
    Boundary Street);
    (b) land leases which have been granted, or surrendered and
    regranted, since 27 May 1985; and
    (c) non-renewable leases which expired on or after 27 May 1985
    by way of lease extension at a Government rent assessed at 3%
    of the rateable value from time to time of the land leased.
    The Government rent is calculated at 3% of the rateable value of the
    property situated on the land leased and is adjusted in step with any
    subsequent changes in rateable value.
    [As distinguished from the above, some properties on Hong Kong
    Island and in Kowloon are held under renewable leases (e.g. 75 years
    renewable for another 75 years) and the rent payable during the second term
    of these renewable leases is governed by the provisions of the Government
    Leases Ordinance (Cap. 40). The rent payable is determined at 3% of the
    rateable value of the property as at the date of renewal. It will remain
    unchanged until the property is redeveloped in which case the rent is 3% of
    the rateable value of the new building. Annual revaluation will not affect
    the amount of rents which are being paid.]

  5. #5

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    Aug 2009
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    Quote Originally Posted by hgcsc:
    No need to pay ONE of them if the property is located south of Boundary Street in Kowloon and on HK Island.
    Thanks for this (and by ONE I assume you refer to Government Rent; rates is still due) - it would appear this is generally true, subject to some caveats around leases that have been renewed in HK Island and south of Boundary Street