HOS Ownership Risks and Safe Arrangements

It is very common for parents to use the Green Form eligibility to purchase Home Ownership Scheme (HOS) flats for their children to live in or for the children to make the mortgage payments. However, HOS flats that have not yet paid the land premium are restricted by the Housing Ordinance and the Housing Authority's policies. Any improper ownership arrangements can potentially lead to inheritance issues, disputes among siblings over property, land premium payment disputes, and even the inability to sell the property in the future. Below, using the most common family model as an example, we explain three main risks and provide arrangement suggestions.

Risk 1｜Parents Are the Sole Owners, Children Make Payments — Legally, Ownership Still Belongs to the Parents

Common Arrangements

• Parents purchase Home Ownership Scheme flats using the Green Form and register as the sole owner
• Children act as the actual occupants and bear the mortgage payments, but are not listed as owners

Legal Effects

• No matter how long the children have contributed, the ownership is 100% that of the registered owner (parents).

Potential Issues

• Parents pass away → Property becomes inheritance: Must be distributed according to the will or the Intestates' Estates Ordinance, siblings may become involved.
• Unpaid land premium: Any inheritance/transfer generally requires approval from the Housing Department, increasing procedural and time costs.
• Children wishing to retain the unit may need to buy out the shares of other heirs; otherwise, they may have to sell or move out.

Children without property rights also cannot unilaterally prevent other family members from claiming distribution.

Risk Two｜Parents + Children with "Joint Tenancy"

It seems fair on the surface, but there are two major limitations in the HOS scenario:

Restrictions on name changes under unpaid land premium

• Any addition, removal, share adjustment, or name change after inheritance may require approval from the Housing Authority; approval is not guaranteed.

After parents pass away, the share becomes part of their estate

• Tenancy in common does not have automatic inheritance; the share under the parents' names must be handled according to the will or intestacy rules;
• Even if only one child is a co-owner, other siblings may still inherit the parents' share;
• If it is a unit with unpaid land premium, name changes after inheritance still require approval from the Housing Department.

Tenancy in common makes inheritance more transparent, but under the HOS system, the flexibility for name changes is limited.

Risk Three | Using "Joint Tenancy" / Right of Survivorship

Features

• Joint tenancy includes "survivorship": the last surviving co-owner can inherit 100% ownership.

In the Impact of Home Ownership Scheme Flats

• For example, "Parent (A) + Child (B)" establish a joint tenancy: If the parent passes away first, all property rights directly belong to B; other siblings no longer have inheritance rights to the property.
• In the case of unsubsidized price, even if it is inheritance by the survivor, related changes may still require approval from the Housing Authority, and the process should not be overlooked.

Although a joint tenancy can avoid division of inheritance, in families with multiple children, it can easily lead to perceptions of unfairness or bias, requiring great caution.

Three Relatively Safe Arrangements

Option One｜Solely Held by Parents, Handled Through Inheritance via Will

• Parents maintain 100% ownership; children can contribute to mortgage payments but are not listed as owners.
• Parents establish a clear will (which can simultaneously plan for beneficiaries, executors, and specific handling methods).

Advantages

• Structure is simple and stable, least prone to errors;
• Can reduce the risk of sibling disputes over inheritance;
• After parents pass away, follow standard inheritance procedures, then complete the name transfer according to the Housing Authority's regulations.

Suitable for: Parents who wish to retain decision-making authority.

Option Two｜Pay Land Premium First, Then Add/Transfer Name According to Market Property Rules

• Housing units that have not paid the land premium cannot freely transfer names; after paying the land premium, the property is treated as a market unit, offering greater flexibility.
• Subsequent name additions/transfers must consider mortgage arrangements, stamp duty, and other taxes; whether exemptions/waivers can be enjoyed (such as certain transfers between spouses) is based on the Inland Revenue Department's current regulations, and not all transfers to direct relatives are automatically exempt.

Suitable for families who hope to eventually smoothly transfer the property to their children while wanting to reduce the Housing Authority's approval restrictions.

Option Three｜Carefully Choose "Tenancy in Common"

• Children immediately own a share of the property rights, making interests concrete.

• After the parents pass away, inheritance still follows the will/intestacy laws (more procedures involved).
• When family opinions differ, major decisions such as premium payments/sales/refinancing are easily stalled.

Suitable for families where all parties have aligned plans.

Summary

By properly handling "ownership arrangements + inheritance arrangements" before buying a property, you can avoid common issues such as future land premium payment obstacles, sibling inheritance disputes, and name transfer rejections.