The Hong Kong Development Bureau will launch a pilot scheme next month, allowing for an additional 20% plot ratio on private redevelopment sites in seven old districts.

The Hong Kong Development Bureau will launch the "Pilot Scheme for Additional Plot Ratio" in September, initially implementing it in 7 old districts for a period of 5 years. Under this scheme, private redevelopment sites located in these 7 old districts that meet the other requirements of the pilot scheme will be eligible for an additional 20% plot ratio to enhance the financial feasibility of redevelopment projects. The Secretary for Development, Ning Hanhao, stated that the pilot scheme is another initiative to promote private redevelopment projects in old districts, following the revision of legislation over a year ago to lower the thresholds for compulsory sale, reflecting the current government's innovative and proactive policy thinking. Ning Hanhao pointed out that data from the past decade shows that about 20% of new residential units from redevelopment projects come from the Urban Renewal Authority, while the remaining 80% come from private development projects, highlighting the importance of private market participation in the redevelopment of old buildings. However, due to acquisition costs involved in old district redevelopment projects and certain development parameter limitations in previously developed areas, market participation has been relatively inactive. Ning Hanhao noted that with the number of buildings aged 50 years or older increasing by more than 500 each year, and even projected to increase by an average of over 700 each year in the next 15 years, it is necessary for the authorities to adopt innovative and bold policies to drive market redevelopment to address the aging of buildings at a rate far exceeding that of the Urban Renewal Authority and the private market, achieve policy goals of addressing hazards of old buildings, and improve living environments. He expressed appreciation for the broad support from society and industry for this policy measure. The Hong Kong Development Bureau stated that the 7 old districts are as follows: Cheung Sha Wan (the corresponding outline zoning plan also covers Sham Shui Po), Matau Wai (including Kowloon City and To Kwa Wan), Mong Kok, Sai Ying Pun and Sheung Wan (part of the same outline plan), Tsuen Wan, Wan Chai, and Yau Ma Tei. Under the pilot scheme, developers who commit to demolishing residential buildings aged 50 years or more, with a site area of no less than 700 square meters, located in the seven old districts, and rebuilding them for residential use will be provided with an additional 20% of the total floor area for which land premium is waived as an incentive. Developers can choose: (i) To submit a planning application to the Town Planning Board, proposing to increase the total allowable floor area of the original site by up to 20%. If approved, the additional plot ratio will have its land premium waived, and the specific implementation arrangement will involve calculating the land value of the additional 20% plot ratio based on a standard amount, which offsets the land premium payable for the original redevelopment project; or (ii) If choosing not to increase the total floor area of the original site by up to 20%, they can convert the additional plot ratio into land value, which can be used to offset the land premium required for any land deals related to the original redevelopment project, or any transactions conducted in the Northern Metropolis and other areas across Hong Kong, including tenders, land deed amendments, or land exchange projects. The validity period for the use of the land value amount is 10 years, during which it will not earn any interest and cannot be transferred in the market. The government will not pay any redemption amount, compensation, or similar sums for any unused amounts after the 10-year period expires. The Hong Kong Development Bureau indicated that the pilot scheme introduces two arrangements to facilitate applications and streamline processes: First, developers can inquire in advance with the Lands Department and the Planning Department regarding the qualifications of the redevelopment site, the land value of the additional plot ratio, and planning matters before submitting their application. Second, the Lands Department will calculate the land value of the additional plot ratio based on a standard amount. The department will also issue Memorandum No. 9/2026, establishing applicable standard amounts for each of the seven old districts.