SCMP Friday, March 9, 2001

Disappointment at 'minimal' help


Homeowners said the Budget measures were of insignificant help without a rise in the mortgage interest allowance.
Some said they would be paying only $18 less a month after the average five and three per cent cuts in rates and government rent respectively for small to medium-sized properties.
Rates and rent for domestic premises above 1,000 square feet will remain unchanged.
The current mortgage interest allowance is $100,000 a year.
"Of course I'm disappointed that the Government's help is so minimal. The $18 saved won't be enough for a single breakfast out," said Wong King-chung, 45. The social worker and his wife, 40, earn more than $80,000 a month in total and live with their two sons, aged eight and nine, in a Fortress Hill MTR residential project.
They pay $35,500 a month for their 800-square-foot flat, which they bought for $5 million just before the property slump in 1997.
It has since dropped 45 per cent in value to about $2.75 million.
"As a negative-equity owner, I don't think the Government should actually take cash from the public coffers to help us. But it wouldn't hurt to raise various allowances. It seems it is having a hard time making excuses to prevent a little bit more spending despite its huge reserves.
"I also find the reason for not raising the mortgage interest allowance unacceptable. For a government that claims to encourage home ownership among the general public, it should have done more. Any measure to help would have benefited not only those with negative assets, but all property owners.
"Fortunately our flat is for self-use only and our salaries are pretty stable," said Mr Wong.
Sali Chen, 35, a secretary, had also been hoping for a generous increase in the mortgage interest allowance. "But this is within my expectations as the Government repeatedly talked about a possible deficit and told us not to expect much."
She will also save about $18 a month in rates and government rent for her house in Sheung Shui, which she bought for $1.85 million in 1997.
She and her husband pay about $7,000 a month out of a total household income of nearly $40,000.