IT-conscious: Commissioner of Rating & Valuation Lo Hing-chung will continue his department's drive to improve efficiency.

The Rating & Valuation Department is studying a new computer system to further improve the efficiency of assessing the rateable values of commercial properties, Commissioner of Rating & Valuation Lo Hing-chung says.

He told news.gov.hk that more than 2.2 million properties in Hong Kong are subject to rates. The annual revaluation of these properties is a great challenge to the department.

To help improve efficiency, it has introduced computer-assisted mass appraisal techniques in assessing properties to rates in the 1980s.

The department's computer system is now well established to cater for valuation needs, with substantial resources invested to develop new systems and upgrade existing ones to support departmental functions.

"The rateable values of about 85% of properties are valued with the assistance of computers, with the remaining 15%, mainly commercial properties such as shops, assessed manually," he said.

Mr Lo said the department is keen to develop a Property Information Hub under a public-private partnership arrangement. The department and the Land Registry are the leading departments involved in this $9.5-million project, which will be tendered next year and is scheduled to start operation in early 2008.

The system will offer the public one-stop online access to the integrated property data held by the two departments, together with value-added services provided by the operators at a fee.

He said the easy availability of information will facilitate property transactions and improve the transparency of the property market.

Annual general revaluation

Mr Lo said the main purpose of a revaluation each year is to redistribute the liability for rates and Government rent fairly among payers, according to up-to-date rental levels of their properties. 

People who are not satisfied with their assessments can lodge an objection to the new rateable value, he said, adding the department received an average of over 50,000 objections a year, of which only about 10% have their assessments reduced.

Citing 2006-07 as an example, he said they received 62,000 objections with only 4,570 cases, or 7%, successfully having their rateable values adjusted downwards. The average reduction was about 11%.

Long history

Hong Kong's rating system has a history of over 160 years. Property rates were first levied in the form of a Police Rate, to pay the expenses of upholding and maintaining the police force in Hong Kong.

Later, other kinds of rates were introduced to meet the costs of public lighting, water supply and the fire brigade, until in 1888 the various ordinances relating to rates were consolidated to provide the framework which exists today.

Before 1976, rates were collected on Hong Kong Island, in Kowloon, and in Tsuen Wan and Kwai Chung in the New Territories.

Between 1976 and 1980, the rating areas were extended to the remaining parts of the New Territories, including Yuen Long, Tai Po, Fanling, Sheung Shui, Sha Tin, Clear Water Bay, Sai Kung, and the outlying islands.

"At that time, I was in charge of Yuen Long, Tuen Mun, Clear Water Bay and Sai Kung districts. I had to spend two to three days each week to reference the properties in these districts and collect ratepayers' particulars," he said.

Apart from the extension of rating into the New Territories, Mr Lo said another major challenge was the change of revaluation cycle.

"Prior to 1999, revaluations were normally conducted every three to five years. From that year, general revaluations have been conducted annually to ensure that all rateable values in the valuation list are updated according to the latest rental level and to ensure that the overall rates liability is distributed among ratepayers according to prevailing market rents.

"It is really a demanding task as we have to reassess the rateable values of over 2 million units within four months. But thanks to the hard work of our colleagues, we manage to complete the job in time."