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Lease Modification, Land Exchange and Lot Extension

Specific arrangements concerning applications by private developers or owners to the Government for modification of the lease conditions for optimization of the use of land within the statutory planning framework in general is in place. Apart from modification (including land exchange), land may sometimes be granted as an extension to a lot, if appropriate.

In modification cases which do not involve any realignment of the boundaries of the lot(s) covered by the lease concerned and are conducted by a modification letter, all the conditions previously applicable to the lease, including the lease term and the rent, will remain unchanged, with the exception of the conditions being modified.

In all other modification cases conducted by way of land exchange involving surrender and regrant of land, the new lease term will usually be 50 years from the date of grant, subject to an annual rent equivalent to three per cent of the rateable value of the property at the date, adjusted in step with changes to the rateable value thereafter, and payable from the date of grant.

The premium payable for the above modification (including land exchange) is generally equivalent to the enhancement in land value, i.e. difference between the value of the land under the previous conditions and its value under the modified conditions.

Applicants may wish refer to the following Lands Department Land Administration Office (LAO) Practice Note:

Streamlined Arrangements

To speed up the development process, since 30 September 2021, requests for advance processing of lease modification / land exchange in association with rezoning applications approved by the Town Planning Board under Section 12A of the Town Planning Ordinance with a set of development parameters clearly defined/firmed up may be accepted, while the Planning Department is taking forward the relevant amendments to reflect the accepted rezoning applications in the statutory town plans in parallel. 

To facilitate joint development or redevelopment of two or more contiguous lots that are held under separate leases, with effect from 17 April 2024, Lands Department will process an application for lease modification pursuant to the streamlined arrangement set out in the Information Note below:


Minimum Flat Size

The Secretary for Development announced on 24 February 2022 that the minimum flat size requirement will be applied to all Government land sale, railway property development projects, projects of the Urban Renewal Authority as well as lease modification / land exchange applications for other private residential development projects.

Press Release issued by Development Bureau for the above announcement on 24 February 2022

The minimum flat size requirement, i.e. saleable area Note of each residential unit should not be less than 26 square metres (about 280 square feet), would apply to all new applications for the relevant private treaty grants, lease modifications or land exchanges received by the Lands Department from 25 February 2022 onwards. Applications received before the said date will not be bound. Furthermore, for development projects that have reached a more mature stage, eg planning permission has already been granted by the Town Planning Board for a development project before 25 February 2022 but the associated lease modification or land exchange application is yet to be made, the above minimum flat size requirement will not be imposed to avoid the need for re-planning of such project, impacting land and housing supply.

Note: Reference may be made to the saleable area as defined in the Residential Properties (First-hand Sales) Ordinance (Cap. 621). However, the terms and conditions of the lease governing the lot concerned shall prevail.

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