Rating System
185. Revenue from rates accounts for about three to four per cent of total government revenue. Last year, I announced in my Budget a review of the rating system. Upon review, I propose to revise the rating system as follows:
| (a) | granting rates concession in a more targeted manner: The Government will continue to consider on an annual basis whether to provide rates concession in the light of the prevailing circumstances, to allow flexibility for the measure. In addition, in view of public concern over the multiple rates concession received by owners with multiple domestic properties under the current rates concession mechanism, we propose that for future rates concession for domestic properties, only those eligible owners who are natural persons can apply for rates concession for one domestic property under their name. Taking the rates concession ceiling of 2022‑23 as a reference, the new arrangement can save around $3.1 billion for the Government when a one‑off rates concession is implemented in the future; and |
| (b) | introducing a progressive rating system for domestic properties: For domestic properties with rateable value of $550,000 or below, it is proposed that rates be charged at the present level of five per cent of the rateable value. For domestic properties with rateable value over $550,000, it is proposed that rates be charged at five per cent of the rateable value on the first $550,000 and at eight per cent of the rateable value on the next $250,000, and then at 12 per cent on rateable value exceeding $800,000. This can better reflect the "affordable users pay" principle. It is expected that about 42 000 domestic properties will be affected, accounting for around two per cent of the total number of private domestic properties, with an increase of about $760 million in government revenue each year. |
186. The above revisions to the rating system will involve significant modifications of the IT system of the Rating and Valuation Department. The Government will implement the above revision proposals in phases. The proposal regarding rates concession for domestic properties will be rolled out in the first phase in 2023‑24, whereas the proposed progressive rating system for domestic properties will be introduced in the second phase in 2024‑25. The Government will in due course consult the LegCo Panel on Financial Affairs on the outcome of the rating system review, the details and the implementation timetable of the proposals.
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