Information Note for the
Provisional Legislative Council Panel on Housing
Tenants Purchase Scheme


This note provides information on various issues raised by Members relating to the Housing Authority's (HA) Tenants Purchase Scheme (TPS) and its impact on the HA's Home Ownership Scheme (HOS).


2. Phase 1 of the TPS was launched on 9 January 1998. As at 6 February, over 70% of the 26 854 households living in the six concerned estates indicated an interest to purchase their own flats.

Programme for future phases of the TPS

3. A programme for future phases if the TPS is being drawn up, and will be finalised in the light of the experience gained in Phase 1.

Deeds of Mutual Covenant for TPS

4. Deeds of Mutual Covenant (DMC) are being prepared for each TPS estate. Their content will be similar to that of DMCs for Home Ownership Scheme estates, i.e. the DMC will indicate the rights and responsibilities of the HA and flat owners regarding the use, management and maintenance of the building. DMCs will be scrutinised by the Lands Department's Legal Advisory and Conveyancing Office before finalisation. DMCs will be ready no later than the date of the first assignments in each estate, i.e. in early April 1998. Purchasers have been informed of the salient points of the DMC in the sales material given to them in the initial invitations to purchase.

HOS rescission cases resulting from families switching to TPS

5. The HA has agreed to refund HOS deposits to tenants of TPS Phase 1 estates who have not yet completed the assignments for their HOS flats upon rescission. As at 23 January, the HA received 55 applications for such rescission. Applicants will normally obtain their refunds within a month.

Review of HOS

6. To improve the attractiveness of the HOS, the HA will, in consultation with the Housing Bureau (HB), review the current details of the scheme. We envisage that the review will be completed by mid-1998.

Mortgage subsidy for Waiting List applicants

7. Waiting List applicants may apply for mortgage subsidise or down-payment loans under the Home Purchase Loan Scheme to buy private sector housing. We are exploring options to enhance this Scheme.

Review of the production level of HOS and Sandwich Class Housing Scheme (SCHS) flats

8. The target groups for HOS, SCHS and TPS are distinct. The TPS provides an additional rung on the housing ladder towards home ownership. It supplements, rather than competes with, the HOS or SCHS. The demand for HOS and SCHS flats will continue to be strong. The HB will monitor the level of supply of flats under these schemes to help to meet the demand from prospective buyers.

Review of eligibility criteria for HOS and SCHS

9. The HB and the HA regularly review the eligibility criteria for both schemes in respect of income and assets limits. The next review will be conducted in 1998-99.

Stamp Duty for TPS

10. The Rating and Valuation Department has valued the flats to be sold under the TPS. Taking account of the physical conditions of the properties, the level of discount available to purchasers, restrictions on letting and resale, and the concessionary rents being paid for these flats, the Department has agreed that none of the flats has a market value for stamp duty purposes exceeding $1 million, a nominal stamp duty of $100 will be payable.

Housing Bureau
February 1998

CSSA recipients to buy public rental flats

The Comprehensive Social Security Assistance (CSSA) Scheme seeks to provide cash assistance to the financially vulnerable to meet their basic needs. The original purpose of the rent allowance payable under the CSSA scheme is meant to cover the cost of shelter and not to achieve home ownership.

2. Under the existing arrangement under the CSSA Scheme, a CSSA recipient living in public rental housing is given a monthly rent allowance to meet the full amount of rent paid to the Housing Department. As the TPS is a new arrangement, the Director of Social Welfare, in conjunction with the concerned bureaux and departments, is reviewing whether the rent allowance payable under the CSSA scheme can be used for the purpose of acquiring public housing flats by CSSA recipients under the TPS.

3. CSSA recipients are not prohibited from joining the TPS. However, they should exercise great care before taking on the long term financial commitment of home ownership. This is because continued eligibility for CSSA is not guaranteed, depending on the changing financial circumstances of the CSSA recipient.