The government aims to pass a bill setting minimum standards for subdivided flats, or Basic Housing Units, by October this year, allowing landlords to register and have their units recognized starting March next year, the Housing Bureau said.

The announcement came during visit of Beijing’s top man on Hong Kong affairs, Xia Baolong, who has told the SAR to “bid farewell” to subdivided units during his visit to the city in 2021.

The regulatory bill proposes that each Basic Housing Unit must have a minimum internal floor area of eight square meters, at least one openable window for ventilation, and separate water and electricity meters.

From March 1, 2026, authorities will begin a 12-month registration period for existing subdivided units that fall short of legal standards and open applications for landlords seeking official recognition of their rental spaces as Basic Housing Units.

Owners or operators of non-compliant units with at least one tenancy by then, once registered with the government, will be granted a uniform 36-month grace period, or from March 1, 2027 to February 28, 2030, to make alterations and seek recognition.

These landlords will receive a full waiver of application fees. However, to prevent last-minute delays, the final six months of the grace period, called a countdown, will ban new tenancies in registered but unrecognized units. Violators may face criminal charges.

For landlords entering the rental market and seeking recognition of their subdivided rental spaces, they have to pay the government $3,000 for every unit they want recognized as Basic Housing Units for five years, and $2,400 for each renewal.

To encourage early applications, the government will lower or waive recognition fees for the first three years. Enforcement starts March 1, 2027, with penalties up to HK$300,000 and three years' jail.

Authorities will offer temporary housing for residents affected by enforcement actions, but emphasize that those already on the public housing waiting list will not receive priority allocation, to ensure fairness to other applicants.

The government estimates that the issue involves about 110,000 households and some 220,000 residents in the city. The government plans to table the bill to the legislature for first and second reading on July 9.

Subdivided flat tenants, some paying several thousand dollars per month, have expressed concerns that the recognition system would increase the cost of their landlords, and in turn they face more expensive rent.

Lawmaker Vincent Cheng Wing-shun welcomed the proposal, but suggested the government take a further step to help tenants who have to move out due to the new rules by relocating them to transitional housing.

(Jamie Liu)

Basic Housing Unit recognition to start next year with $3,000 fee per unit