Rates concession “shrink" The landlord intends to pass on the tenant
The Government has recently proposed a reform of the rate concession mechanism. In the past, a property owner was able to obtain a rate concession for each property. Under the new mechanism, only one of the owners holding a number of properties can be given a concession. It is estimated that it can save 3 billion yuan in public funds every year. Some investors believe that the new measures will “complex" the original mechanism. Some tenants have indicated that they plan to increase rents and reduce the impact of the new measures.
The Rating and Valuation Department (hereinafter referred to as the Rating and Valuation Department) will determine a rateable value (hereinafter referred to as the rental value) for each property. The annual rate is generally 5% of the rental value. For example, in the fiscal year of 2018/19, the government provides rates concessions in four quarters, with a ceiling of 2,500 yuan per quarter. The authorities estimate that the warehouses will receive about $17.8 billion. The Government has recently suggested that in the future, each owner can only obtain a rate concession for a rateable property. Both residential and non-residential properties are included. The owners should take the initiative to notify the Owner of the Owners’ Rating and declare which property to declare. If you get a concession, you will not be able to get a rate concession. It is estimated that the Government will “squat" about $3 billion.
“One-on-one" buyers are affected
Under the new measures, except for developers and rent-collecting companies that have been greatly benefited by criticism in the past, they only hold 2 to 3 properties, and even hold a residential unit and a separately assessed parking space in their own name. Only one of the properties can be selected for a rate concession.
In recent years, many residential projects have attracted investors to purchase. For example, the Nanchang Station in Cheung Sha Wan, which was recently joined in the past month, was opened in March 2017. At the time of the sale in March 2017, more than one group of the same buyer, “One Joto", bought 2 to 3 people. In the case of Kowloon East Tak Kai Hui in February last year, more buyers were buying 15 groups in one breath. In the future, only one of the flats will be eligible for the rate concession.
Mr. Wu, the owner of the two properties in Kowloon, said that if the new concession measures are in effect, the corresponding increase in rates will require “individual plus less rent" to reflect the related expenses.
Mr. Tang Junming, Chairman of the Kodak Group, said that the new measures need to be done publicly. “Simple scams are so complicated." There are also many doubts for small owners. He thinks that the current ceiling for each property is “easy to do".
Some people in the industry pointed out that in recent years, the Government has different taxes for those who hold more than one property. The new measures have “punished" such persons in disguise. He said that if they hold their own homes and parking spaces for their own use, it will be difficult to obtain them in the future. Concession; instead, one owner holds two properties in private and in the name of the company. Both properties can benefit from the rate concession in the future and are prone to inequities.