Tenant Purchase Scheme

In December 1997, the government approved a scheme, called the Tenant
Purchase Scheme, for the HA to sell public rental flats to tenants. The
target is to provide the opportunity for at least 250 000 families living in
public rental housing to buy their flats at reasonable and affordable prices
over the next 10 years. The scheme will make a significant contribution
towards achieving the government's 70 per cent home ownership target.

The basic sale price will be set by reference to an 'adjusted replacement
cost' approach which takes into account the replacement cost, location of
the property, its age and other relevant factors.

A structural safety guarantee of seven years will be provided and a
maintenance fund will be set up with a one-off contribution from the sales
proceeds to pay for major repair works in the future. The first batch of
about 27 000 flats in six estates, selected from estates built between 1985
and 1992, was scheduled for sale in January 1998.

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