Answer: When acquiring an owner-occupied domestic property, the Housing Society will offer an owner-occupier the market value (valued on vacant possession basis) of the property plus Home Purchase Allowance (HPA) so as to assist him to purchase a replacement flat. The assessment of HPA is based on the value of a notional flat, which is defined as a seven-year-old flat in a comparable quality building, situated in a similar locality in terms of characteristics and accessibility, and located at the middle floor with average orientation.

In other words, the HPA is the difference between the value of the notional replacement flat and the open market value of the property being acquired. Each owner-occupier is entitled to receive HPA for no more than three properties.

In assessing the unit rate of a notional replacement flat of seven years old, the Housing Society will appoint valuation consultant firms to conduct analysis on the transactions in the nearby area. The notional replacement flat will be located at the middle floor of a notional building with average orientation and without sea view. The assessment involves comparing the acquired properties with the sale transactions of similar properties and making necessary adjustments for various factors such as the date of transaction, age, orientation, floor, quality, size, accessibility and environment of the flat.

An owner of vacant property will be offered the market value (valued on vacant possession basis) of his property plus Supplementary Allowance (SA). An owner of tenanted property will be offered market value subject to tenancy plus SA. The SA amount is normally 25% to 75% of the HPA, depending on the number of properties an owner owns and the occupancy status of the properties. For details, please see "Illustrations of Different SA".

This website is for reference only. The information contained is by no means exhaustive and is not legally binding and shall not be in any way construed as a legal document. The principles outlined herewith are subject to change without prior notice.