Hong Kong landlords will be banned from terminating tenancies or taking legal action against business tenants from specific sectors for up to six months, Financial Secretary Paul Chan announced in the city’s budget on Wednesday.
The measure was set to help small and medium enterprises (SME), “taking into consideration that rental payment constitutes a major part of the operating expenses of enterprises,” Chan said, adding that “many SMEs currently face huge challenges amidst the adverse business environment.”
The government will introduce new legislation to ban landlords from “terminating the tenancy of or not providing services to tenants of specified sectors for failing to settle rents on schedule, or taking relevant legal actions against them.”
The measure will be in effect for three months and could be extended for another quarter if needed. Because of a sunset clause, the law will cease to have effect after six months.
“The arrangement will provide enterprises in deep water with breathing space and help secure employment,” said Chan.
The Hong Kong Monetary Authority will “be in close communication” with banks for them to “exercise flexibility” for landlords whose ability to repay loans is affected by the decrease in their rental income.
The government aimed to gazette the law on Friday, a government source said. Legislative Council sessions are set to resume in March but the government will push for the earliest possible legislation.
The penalty for breaching the law will be three times the rent owed, or a minimum fine of HK$50,000. The measure is expected to benefit more than 130,000 commercial tenants.
Other relief measures for businesses
Chan also announced relief measures for businesses, including tax cuts, rates concessions, and waived fees.
Policies announced by the financial secretary for businesses include:
- Reducing profits tax by 100 per cent, up to HK$10,000.
- Rates concessions for non-domestic properties for a year, capped at HK$5,000 for the first half of the year, and HK$2,000 in the second half.
- Business registration fees will be waived for 2022-23.
- The 75 per cent waiver of water and sewage charges for non-domestic purposes will continue, subject to a monthly cap of HK$20,000 and HK$12,500, respectively.
- Existing waivers of government fees and charges for 34 groups will be extended for a year.
- The 75 per cent rental or fee concession for eligible tenants of government premises and eligible short-term tenancies and waivers under the Land Department will be extended for six months. Those who had to close their premises under government orders will continue to receive full rental waivers.
- Application period of all guarantee products under the SME Financing Guarantee Scheme extended for a year.
- The maximum loan amount of the Special 100% Loan Guarantee will be increased from 18 months to 27 months of employee wages and rents, the loan ceiling will be raised from HK$6 million to HK$9 million. The maximum repayment period will be extended from eight years to 10 years.
HKFP’s coverage in full:
- HK$10,000 consumption vouchers for all.
- Gov’t pledges over HK$54b to fight Covid-19 ‘on all fronts and at full speed’.
- One-off tax cuts, property rate concessions, electricity subsidies for residents.
- Economic rebound surpassed global growth last year, but will worsen under Covid.
- HK100 billion earmarked for Northern Metropolis plan.
- Landlords will be barred from terminating the tenancies of some small firms.
- Police vehicle and gear budget to quadruple to HK$508 million.
- Prisons to spend over HK$677,000 per detainee next year with 10% budget boost.
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