LCQ8: Zonal Plan for Calculation of Compensation Rates
20.10.2021

Following is a question by the Hon Abraham Shek and a written reply by the Secretary for Development, Mr Michael Wong, in the Legislative Council today (October 20): Question: Since 1978, the Government has adopted an ex-gratia zonal compensation system for resumption of land in the New Territories. Owners of private agricultural/building land in the New Territories affected by resumption are eligible for ex-gratia compensation as an alternative to statutory claims. The ex-gratia compensation rates for various districts were shown on the Zonal Plan for Calculation of Compensation Rates (the Zonal Plan) which used to be available for inspection by members of the public at all New Territories District Lands Offices. A number of owners of private land in the New Territories and valuation professionals have relayed that they recently found that the Zonal Plan is no longer available for inspection by members of the public. They are concerned that, in the absence of the Zonal Plan, more time is required for valuing the private land to be resumed, and the land resumption process will inevitably be lengthened. In this connection, will the Government inform this Council: (1) since when the Zonal Plan has ceased to be available for inspection by members of the public, and of the reasons for that; whether the Government has consulted the relevant parties in respect of the cessation; and (2) whether the Government has plans to reinstate the arrangement whereby the Zonal Plan is made available for inspection by members of the public; if not, of the measures in place to enhance the transparency in respect of compensations for land resumption exercises, so that the rights of the owners of private land in the New Territories are duly protected? Reply: President, When the Government invokes legislation(s) to resume private land for public purpose, compensation will be provided to the affected land owners in accordance with the relevant statutory requirement (statutory compensation). Statutory compensation aside, the Government has put in place an ex-gratia compensation system for resumption of land as an alternative arrangement and a simplified administrative mechanism for handling land compensation matters. The ex-gratia compensation system for land in the New Territories consists of four compensation zones (i.e. Zones A, B, C and D). The rates for each zone are expressed in varying percentages of the basic rates, and under each zone, the agricultural land and building land have different basic rates. The definition and ex-gratia compensation rates of Zones A to D are as follows: Zone Definition Ex-gratia compensation rate (Note 1) (per square foot) Agricultural land Building land A New Town Development Areas (Note 2) (namely areas within the New Town boundaries as shown on gazetted outline zoning plans for new towns), or those areas that are affected by essential projects with territory-wide significance 120 per cent of basic rate Valuation (Note 3) + 120 per cent of basic rate B Areas which may be brought under urban development in the near future, either by adjoining layout areas (Note 4) due to their proximity to such areas or by reason of their known potential for urban development 75 per cent of basic rate Valuation (Note 3) + 75 per cent of basic rate C Areas in which no urban development is planned and which are unlikely to be affected by later extension to layout areas, but where resumptions are required sometimes for purposes directly connected with urban layout development and sometimes for local improvement schemes 50 per cent of basic rate Valuation (Note 3) + 50 per cent of basic rate D Areas not included in other zones 30 per cent of basic rate Valuation (Note 3) + 30 per cent of basic rate According to the established mechanism, before implementing a project involving land resumption, the Government will consider the compensation zone applicable to the project having regard to the location of the land to be resumed and the nature of the development project concerned, such as whether the land to be resumed belongs to any new development areas, whether the works are essential from a territory-wide perspective, whether urban development is involved, and whether the land is to be resumed for local improvement plans etc. If the landowners do not accept the ex-gratia compensation offer made by the Government, they may make a claim for statutory compensation to the Lands Department (LandsD). If an agreement cannot be reached regarding the amount of the claim, either side may refer the case to the Lands Tribunal for final determination of the amount of statutory compensation. The above is the background of the ex-gratia compensation system for land in the New Territories. My reply to the two parts of the question is as follows: (1) The LandsD previously compiled a Zonal Plan for ex-gratia compensation for Land in the New Territories (Zonal Plan) annually, mainly to reflect past decisions on ex-gratia compensation zones. The Zonal Plan was available for inspection at all District Lands Offices in the New Territories. In this regard, it should be noted that the Zonal Plan had indeed no reference value for future cases. The compensation zone for land resumption in each development project is considered on a case-by-case basis in accordance with the above mechanism, with reference to the definitions of the different compensation zones, the location of land to be resumed, and the nature of the development project, instead of following the zones as shown on the plan. For example, a land located in a certain area might have been marked as Zone C due to a local improvement project implemented in the area some years ago, a decision of which was reflected in the Zonal Plan; if the Government subsequently included such land into a new development area, the Zone C previously shown would no longer be applicable. Considering the limitations of the Zonal Plan and the unnecessary misunderstandings and worries possibly caused to the affected landowners on some occasions, the Development Bureau and the LandsD have, upon review, ceased the compilation and the provision of such plan at the District Lands Offices for public inspection from 2021-22 onwards. As these arrangements have no impact on the operation of the ex-gratia compensation system, the Government has not conducted any consultation on the matter. (2) Due to the limitations of the Zonal Plan and the misunderstandings that it may cause, the Government has no intention to compile and publish the plan again, or else confusing messages will continue to spread and will do no good to the public and land owners. As mentioned above, before implementing a land resumption exercise, the Government will consider the compensation zone applicable to the project with reference to the zonal definitions and the circumstances of the case. Having assessed the compensation zone applicable, the LandsD will inform the affected owners. The zonal definitions and the ex-gratia compensation rates are public information that are available at government websites, and LandsD will also explain them to owners and their representatives that may be affected. The LandsD will also consolidate existing information and upload them onto the department's website shortly with a view to achieving a more systematic display of information for easy reference by the public. Note 1: The current basic rates for agricultural land and building land (effective from October 1, 2021 to March 31, 2022) are $1,110 per square feet and $2,202.5 per square feet respectively. The rates are revised twice a year to take into account the change in land prices, and the revised rates are to take effect on April 1 and October 1 each year in announcements through Government gazette. Note 2: Also refers to New Development Area. Note 3: This component is a compensation amount assessed on open market value of the affected building land (including any legal structures erected on the building land). Note 4: Layout areas broadly refer to new town and new development areas.