The services of Sale, Purchase and Lease of Hong Kong property
We provide the service of sale, purchase and lease of Hong Kong property. For more details,
please click: MORE
Hong Kong Village House Introduction
1. Village house environment and landscape
Most of the village houses are located in the suburbs. The environment is open, the scenery is beautiful, the air is fresh, and the space is relatively large. There are even parking spaces, gardens, roofs, and terraces. Many village houses have a single floor of 700 square feet, which is larger than many real estates. However, before making a decision, the owner needs to pay attention to the suburban areas, where there are relatively more snakes, insects, rats and ants. Gardens and roofs also need more time for maintenance, and they also need more protection in case of typhoons or heavy rains in summer. Prospective owners need to take these efforts into consideration.
2. Village house transportation and parking spaces
The village house is located in the suburbs, so the traffic is naturally not as convenient as the urban area, and it is relatively troublesome to get in and out. You need to consider the traffic time when you go out. People with cars have less trouble, and many village houses also have parking spaces, which avoids the trouble of parking lots.
3. The complexity of village house ownership
A village house is a special kind of title, which involves small house policy. It also involves whether the land owned by the village houses is private land or government land, and even the roads on which they are located have separate driving rights and pedestrian rights, etc., which will also affect issues such as whether there are illegal buildings, land premiums, mortgages, and stamp duties. Ownership is much more complicated than ordinary buildings. Prospective owners who intend to purchase a small house are advised to seek professional help.
4. Land premium for village houses
Due to changes in housing policies, village houses are divided into old houses (built from 1905 to 1972) and small houses. Small houses need to pay land premiums depending on whether they belong to private land or government land (newly approved land). Small houses on private land are resold within 5 years after the satisfaction of the certificate (completion of the building project), and the small house on official land needs to pay the land price at any time before it can be legally sold. Another kind of small house belongs to the "ancestral hall" and cannot be resold casually. It needs to be signed by all managers and a letter of consent issued by the Secretary for Home Affairs can be resold.
5. Village house mortgage and tax rate
At present, first-time home buyers can afford up to 90% of the mortgage, but village houses can only afford up to 60% of the mortgage. The mortgage insurance premium will be about 0.5% higher than that of ordinary buildings, and the mortgage cost will be relatively high. Bank valuations will also be relatively conservative. As for the tax rate, you need to check whether the title of the village house is a single property (the main staircase is inside the unit), or a strata property (the main staircase is outside the unit). If you want to buy three floors at the same time if you want to purchase three floors of a strata property, the tax rate will be calculated as the purchase of three floors, which means the second and third floors. Even if you buy a home for the first time, you need to pay 15% of the stamp duty for non-first home buyers.
6. Unauthorized construction of village houses
Many village houses are equipped with gardens, terraces or roofs, so many people would like to build some buildings on the gardens or roofs. However, if prospective owners encounter buildings in gardens or rooftops, they may not all be illegal constructions, and they can check whether there is a "paper entry" on the title deed. The government established the "New Territories Village House Unauthorized Buildings Declaration Scheme" in 2012, which is renewed every five years. If the declared buildings are legal. As for any unauthorized structures that were not applied for before the end of 2012, or constructed after that, it is illegal.
7. Install solar installations on the roofs of village houses
In addition, it is legal for some homeowners to install solar power generation devices on their rooftops, and it belongs to the "Renewable Energy Feed-in Tariff Scheme". It is planned that solar power owners can sell electricity to CLP or Hongkong Electric for 3 to 5 yuan per kilowatt-hour, and can also use the electricity for their own use with investment subsidies. The payback period is 7 years, and it becomes an income item for owners in disguise.
8. Village house signal network
Many village houses are located in remote places, and the cost of broadband cables is relatively high. Prospective owners who have requirements for broadband and mobile phone networks, remember to check the signal network status of the desired unit.
9. Water supply and septic treatment for village houses
Buildings in Hong Kong are provided by the Water Supplies Department, and village houses are no exception. However, there are still a small number of village houses that use well water, and there are also village houses that need to regularly find a manure truck to suck up manure. These arrangements and handling must be inquired clearly before buying a village house.
10. Moving large furniture in village houses
Buying a village house to live in will inevitably require decoration and addition of large furniture, such as sofas, combination cabinets, wardrobes, washing machines, refrigerators, etc. Since the village houses do not have lifts, most moving companies will charge a moving surcharge for the village houses above ground level. In case of a village house with insufficient stair space, it is more likely that the furniture will need to be hoisted up to enter the house from the balcony, and the moving fee will be higher.
How many types of leases are there for village houses?
There are many ways to choose a village house, owners or tenants can choose the following types:
1. Underground with garden
Many village houses have gardens on the ground floor. You don’t need to go up the stairs on the basement floor, and you have your own private space, and you can even park your car. However, most of the underground units will be relatively humid, and there will be a lot of mosquitoes. If the units are closer, the underground units will be relatively dark.
2. Middle layer
Middle-rise units can avoid the problem of humidity downstairs or overheating upstairs, and the property price and rent are the most affordable, so many people will choose it. However, the middle-level units do not have gardens or rooftops, only terraces can be used, and the relative activity space is the least.
3. The third floor with rooftop
The third floor has the highest degree of daylighting. If the residents with the roof own a two-story unit, some third-floor owners will even participate in the government’s solar power generation panel plan, install solar power panels, self-sufficient electricity and can sell electricity to the power company. The benefits are even greater. many. However, the residents on the third floor are prone to problems such as water leakage because the roof is facing downwards, and it will be relatively hot in hot weather.
In addition to the strata units, many village houses retain the title deed of the entire duplex, and there are also upper duplexes (middle floor, third floor with roof), or lower duplexes (ground floor, garden and middle floor), etc. There are many changes. The duplex can of course double the space and have the advantage of having different floors. However, the amount of money for a duplex floor is relatively large, and it is difficult to obtain a sufficient mortgage, and additional stamp duty needs to be paid, so some owners will also choose "strata lease".
What is a Strata Deed?
If there are several units in the same lease, the owner will need to pay 15% additional stamp duty. There will also be insufficient opportunities for bank mortgages. Therefore, when buying a village house, some owners will choose to do a "strata lease", that is, different floors or different titles, and the unit and parking space can also be divided into leases. The advantage is of course that the additional stamp duty is exempted, and the mortgage ratio can be increased because the selling price of the unit after the strata is lower. The owners can also sell the units separately in the future, making it easier to find a seller. Therefore, it has become a good choice for many people who buy village houses.
If you want to apply for a strata, no matter whether the partition has been changed or not, you need to obtain the approval of the Buildings Department first. The owner can complete the relevant stratification procedures through a law firm, and remember to complete the registration at the Land Registry after the stratification.
What are the risks of a strata deed?
1. Strata intervals and fees
When many people want to build a village house strata, they will also change the unit spacing along the way. The renovation works involved also require qualified surveyors to re-draw the plans and obtain approval from the Buildings Department. The changed interval may not necessarily be accepted by the Buildings Department, and may need to be revised several times. Among them, the construction fee, paper entry and legal fees may be higher than the additional stamp duty. The owner needs to calculate the cost carefully before dividing the lease.
2. Risk of Strata Illegal
If the unit used as a strata is not listed in the land register, or there are any problems with its ownership, if you change the unit interval for strata without authorization, you may fall into the law by mistake. Therefore, before subdividing the lease, it is necessary to check the records clearly before formally subdividing the lease.
After reading the precautions for buying a village house and understanding the difference between a village house and ordinary buildings, you can avoid the traps of different village houses and obtain an ideal comfortable home.