Land in Hong Kong is leased by the Government or held by it. New leases are usually granted for a period of 50 years from the date of grant at a premium, and is subject to the payment from the date of grant at an annual rent, equivalent to three per cent of the rateable value of the property at that date, adjusted in line with changes in the rateable value thereafter.

While government land is usually sold by public auction, sale by public tender is also a practice in certain circumstances, such as when the land is needed for a petrol filling station or when the Government wishes to examine in advance detailed proposals. This was the case with the tender of the former Marine Police Headquarters in Tsim Sha Tsui for commercial development which involved heritage preservation.

In some cases, land may be made available by private treaty grant. In these direct grant cases, the premium charged varies from nominal (as in the case of non-profit-making schools) to full market value (as in the case of public utility companies).

In October 2003, the Government released a statement on the implementation and consolidation of its housing policy. It contained among other reforms, the decision to resume the sale of land (suspended in November 2002) through the Application List System which allows interested parties to make guaranteed bids for sites on the Application List, in order to trigger an auction or tender. This mechanism was significantly enhanced in 2005 with the introduction of various measures which enabled processing time to be cut by 30 per cent, deposit requirements to be simplified and bids equivalent to a minimum of 80 per cent of the assessed market value of sites to be accepted to trigger the sale process.

In 2006, five residential sites, measuring a total of 3.42 hectares were sold for $7.06 billion.

In addition to land supply from the Government, existing privately held land leases may be amended, normally at a premium, on lease-holders' initiatives to provide for a more intensive or different type of development in accordance with the prevailing planning goals. These amendments are effected by either modifying the lease or through land exchange. Other land exchanges may be entered into by the Government for various reasons ranging from the rectification of lot boundaries to the implementation of a town planning layout. During the year, 98 transactions involving lease modifications and land exchanges were concluded, involving a total of 232.56 hectares of land.