Q1｜Do I have to pay the land premium to sell a Home Ownership Scheme (HOS) flat that hasn't had the land premium paid?
Not necessarily. It depends on who you are selling to.
- If the land premium has not been paid → It can only be sold in the HOS Secondary Market (buyers must have a Green Form or eligible White Form).
- If you want to sell to buyers in the open market (anyone) → You must first complete the land premium payment.
Paying the land premium is an act of property ownership, requiring consent from all owners (whether held by a single owner, as joint tenants, or tenants in common).
Q2｜How long does the land premium payment process take? What needs to be prepared?
Generally, it takes about 6–12 weeks (depending on the Housing Authority's processing progress).
The process includes:
- Submitting the land premium payment application (signed jointly by all owners)
- The Housing Authority sends a valuer to assess the market value
- Owners pay the land premium as calculated by the Housing Authority
- Obtaining the land premium approval and documents
- Completing the update of records at the Land Registry
After the land premium payment is completed, the Home Ownership Scheme (HOS) flat becomes a "free market property" and can be bought and sold normally.
Note: The valuation after land premium payment ≠ the bank's mortgage valuation.
Q3｜How is the land premium amount calculated? Is the premium valuation equal to the market price?
The land premium amount is calculated by the Housing Authority's "reassessed market value × loan-to-value discount ratio" and is not equal to the market transaction price.
- Housing Authority premium valuation: Used for land premium calculation
- Market transaction price: How much the buyer is willing to pay
- Bank mortgage valuation: How much the bank is willing to lend
These three can be different.
Common scenarios are:
- Premium valuation < market price (A lower premium does not necessarily mean the bank will lend the full amount)
- The bank will still conduct its own mortgage valuation
- If the mortgage valuation is lower, the buyer needs to make up the difference
This is where the "most common discrepancy" occurs in transactions after paying the land premium.
Q4｜After completing the land premium payment, can I sell immediately? What situations might delay the transaction?
After completing the land premium payment, you can enter the open market to sell, but there are still several factors that can affect the transaction time:
The most common reasons for delays include:
- The land premium has not been officially registered at the Land Registry (lawyers cannot complete the sale)
- Co-owner documents are incomplete/someone is not in Hong Kong to sign
- The property has unauthorized structures or breaches of deed restrictions, affecting bank valuation
- Building maintenance or owners' corporation issues affecting mortgage approval
- The buyer's valuation is insufficient, requiring time to cover the price difference or switch banks
"Documents not updated" and "bank valuation" are the two most common points that delay transactions.
Q5｜What are the most common issues when selling an unsubsidized Home Ownership Scheme flat? How to avoid them?
It's not the subsidy repayment itself, but rather the following three types of problems:
① Ownership Rights Not Properly Organized
- Co-owners have not completed inheritance/transfer of names
- Tenants in common disagree ➡ Premium payment and sale cannot proceed.
② Incomplete Property Documents
- Old deeds, unreleased deeds, supplemental deed documents not processed
- Land Registry documents not updated ➡ Lawyer cannot complete the transaction.
③ Buyer Mortgage Gap
- Bank valuation lower than the market asking price after land premium payment
- Unauthorized structures/building conditions affect approval ➡ Transaction period needs to be extended or even leads to failed sale.