Guidelines for incomplete property sale coming soon

Secretary for Transport and Public Works Lau Si Io vowed yesterday that the legal process to regulate unfinished property transactions will be submitted to lawmakers for approval at some stage this year.  In the meantime, guidelines will be established to increase the transparency of transactions, he pledged.
Government representatives held a meeting yesterday to discuss measures to curb speculation in the real estate market. The next step, secretary Lau told reporters, will be to ‘study guidelines’ in order to improve how government departments monitor the transactions of incomplete apartments, such as the Finance Services Bureau.
According to Lau, the measures will come into effect before the new legal system to regulate unfinished property is enacted; however no date has been confirmed.
“Although these guidelines are not law, public services will supervise its enforcement,” he assured.
Meanwhile, the public consultation on the government proposed system to regulate sales of incomplete properties will be completed on April 25. When the system was launched for public consultation in February, the government’s plan was to pass it onto lawmakers in the fourth quarter of this year.
Lau assured yesterday there were no changes on the timetable, adding that the system is aimed to promote the healthy development of the real estate market.
The guidelines announced by the government official could be the answer to lawmakers’ concerns, as the first standing committee of the Legislative Assembly (AL) slammed the government last month for announcing the revision of the rules on stamp duty before the legal system for incomplete property transactions was ready.
The committee’s president, Kwan Tsui Hang, had warned that “some problems may arise in the future”, questioning how the DSF will assess sale prices of these units if very often the architectural design is not complete.
At present, the sale of incomplete apartments in the SAR is overseen only by the reservation contract system in the Civil Code. However, the new legal system introduces tougher rules.
For instance, developers can apply for approval from the Lands, Public Works and Transport Bureau (DSSOPT) to sell incomplete properties only after the temporary hierarchical registration with the Property Registry is completed, the construction licence is acquired from DSSOPT and the foundation works are established.
Lau was speaking to reporters after a closed door meeting with the members of the Third Standing Committee of the AL. Lawmakers and the government met to continue the discussion on the draft law concerning the purchase of affordable housing.

Social housing rents revamped

Most families living in social housing units will pay a lower rent after July, according to the new calculation method, published in yesterday’s Official Gazette. For instance, a household with a monthly income of MOP 5,000 per person will see their rent drop from MOP 600 to MOP 425.
Rents for a family with a monthly income of MOP 8,000 per person will rise from MOP 600 to MOP 1,000. The Chief Executive dispatch creates four calculation levels and scrapes the rent ceiling.
In addition the Housing Bureau can terminate a contract with households whose monthly income exceeds the limit for three years, or is twice the limit for two consecutive years.

The government again ensured that existent candidates would not be subject to maximum and minimum income caps, as well as other restrictions stated in the draft law.
President of the third standing committee, Cheang Chi Keong, added that those candidates who have already inked the deed of the unit will be subject to the penalties of the new law. At the same time, those who signed a promise of sale and purchase contract would not face the new rules for compensation and re-sale.
“In terms of re-sale, the draft law states that if the price of a sole unit is higher than the value paid to the government, the beneficiaries will have to refund part of the money,” Cheang pointed out.
The situation for existing candidates was the major concern expressed by lawmakers when the law was passed in the first reading. Yesterday, the head of the committee said the debate between lawmakers and the government was ‘fruitful’ and doubts over this issue have been resolved.
The committee will meet again with the government next Thursday. Cheang said lawmakers will enquire with the secretary regarding income caps, while the government is set to present figures on affordable housing.