Hong Kong
Hong Kong funds much of its government from land — the state owns all land and leases it, capturing land value as a primary public revenue source.
Overview
Hong Kong operates one of the world's most significant systems of public land value capture. Almost all land is owned by the government and granted to users through long-term leases rather than freehold sale. Revenue from land leases and land-related charges has historically funded a large share of public spending, allowing famously low income-tax rates.
The Mechanism
By retaining ownership and auctioning leases, the Hong Kong government captures much of the value of location directly — a land value capture model achieved through public landlordship rather than a recurrent land tax. As the city grew into a global financial hub, rising land values flowed substantially to the public purse.
Significance and Tension
Hong Kong shows the revenue power of capturing land value. It also illustrates a tension: because the government benefits from high land prices, the system has been criticised for contributing to some of the world's least affordable housing — a reminder that how captured land revenue is used matters as much as capturing it.
See Also
Sources
- Yu-Hung Hong (1996), "Can Leasing Public Land Be an Alternative Source of Local Public Finance?", Lincoln Institute. PDF