[jimbob70]

Originally Posted by freeier

technically a 99 y.o. lease means what you are paying for is not the actual ownership, but just a lease from the government that can expire after 99 years.

That's one thing I never understand.

So does that mean the property you bought is owned by the government at the end of the lease?

So the property is not something that you can pass on to your kids?

[PDLM]

Correct - that is true of leasehold property everywhere - nothing unique to Hong Kong.

[freeier]

i heard once from someone on the website that leasehold is a concept introduced by the brits.

hence you see it prominently in singapore, hk, etc.. ex british colony.

i believe it doesn't behave that way in US and I am sure it does not work that way in Japan

[lionrock88]

Technically speaking, yes. If the lease on the land is not renewed, ownership of any property on it can revert back to the government upon expiration.

Practically speaking however, the government will extend the lease in order to maintain public confidence in HK's property market and prevent a collapse of the HK economy.

During the 1970s/early 80s, there was genuine concern about the future of HK and what would happen once the land leases expired in 1997. Both the British and PRC govts moved quickly to reassure the public and developed the 1984 Joint Declaration - an important element of which extended land leases throughout the territory.

I would imagine that around 2020/2030s, the govt will move again to restore confidence.

Originally Posted by jimbob70

That's one thing I never understand.

So does that mean the property you bought is owned by the government at the end of the lease?

So the property is not something that you can pass on to your kids?

[HKNewBi]

You can pay to extend a lease therefore hand something over to your kids.

The 2047 extension isn't so much about confidence - there is simply no practical way every property in the NT could revert to govt ownership on the same day!!!

[lionrock88]

Originally Posted by HKNewBi

You can pay to extend a lease therefore hand something over to your kids.

The 2047 extension isn't so much about confidence - there is simply no practical way every property in the NT could revert to govt ownership on the same day!!!

It's got everything to do with confidence in HK's property market.

Can you imagine what would happen if the govt didn't reassure the public in the years leading up to 2047 that they would be extending the land lease? Property prices would plummet as we approached the date since ownership of any property sitting on the underlying land would revert back to the govt and become worthless - at least to you.

There's no difficulty in having all properties revert to govt ownership on the same day. Simply put, on June 30, 2047 you own the property, the next day you don't - and you have no claim on the property.

[KnowItAll]

Are there ANY cases within common law countries where a govt had not renewed multiple leases?

[sxc]

don't the owners in the UK (eg duke of xxxx) force the occupier to pay money to renew leases?

[jimbob70]

So buying leasehold is basically just renting for a long period?

What happens to the flat if it has 20 years to run before the lease runs out. Is it worthless?

and people say the lease can usually be renewed but 'usually' does not inspire much confidence. What if its refused?

[FilipH]

My sister lives in London and explained me last week about this concept.

Imagine you see at a real estate agent a property on Leasehold with 50 years left.

That means after 50 years the land goes back to the Queen. Then you have to negotiate the renewal of the lease with the Queen. In London for a prime property you can easily pay 10% of the value to get a new lease.

A renewel is valid for 99 or 100 years (forgot which one it is). You pay, you get the renewal. They never take this option away from you. Of course a house with a shorter lease left will have less value then one with a longer lease.

You have legal certainty that you can renewal the lease, but you gotta pay for it.