The current-term Government is committed to reform and embraces changes. With a view to tackling the “long-standing, big and difficult” issue of substandard subdivided units (SDUs) in a comprehensive and orderly manner, the Chief Executive announced in the 2024 Policy Address to put in place, through legislation, the Basic Housing Unit (BHU) regulatory regime, under which SDUs in residential buildings have to comply with a set of minimum standards of living conditions, including minimum area, minimum height, fire safety, structural safety, separate toilet, water supply requirements, lighting and ventilation, as well as separate water and electricity meters, and obtain BHU recognition before they can be legally let out for habitation. This aims to ensure the provision of safe, hygienic and reasonable living conditions in SDUs. There will be criminal liability on the person who lets out unrecognised SDUs, while the tenants concerned will not be held liable.
HB conducted a two-month stakeholder consultation from December 2024 to February 2025 on the proposed regulatory regime on BHUs, and consulted the Legislative Council (LegCo) Panel on Housing in December 2024 and March 2025 respectively. LegCo members and stakeholders generally agreed with the framework of the BHU regulatory regime.
The Basic Housing Units Bill was gazetted on 20 June 2025, and was scrutinised and passed by the LegCo on 26 September 2025. The Basic Housing Units Ordinance was then gazetted on 3 October 2025 and will come into effect on 1 March 2026, representing a significant milestone in eradicating substandard SDUs.
Part IVA of the Landlord and Tenant (Consolidation) Ordinance (Cap. 7) (the Ordinance) which implements tenancy control on SDUs came into force on 22 January 2022. The Rating and Valuation Department (RVD) is responsible for the implementation of the Ordinance.
The Ordinance aims to regulate SDU tenancies and provides protection to SDU tenants in various aspects, which include providing four-year security of tenure (first term of two years and second term of two years) for the tenants; restricting the rate of rent increase on tenancy renewal, which must not exceed the percentage change of the territory-wide rental index for all classes of private domestic properties compiled and published by the RVD during the relevant period, and is capped at 10%; and prohibiting landlords from overcharging tenants on utility and services (such as water and electricity), etc.
