Some village houses in the New Territories predate the Small House Policy. Houses on land registered as building land under Block Government Leases, formerly known as Block Crown Leases (to be explained in greater detail below), are exempt from Small House Policy standards. Additionally, some non-indigenous farmers were permitted to build homes, classified as “farmhouses”, on agricultural land. 

In the early 1970s, government surveys showed that only about 7% of homes in the New Territories were permanent structures. Others were mostly old village houses, temporary dwellings, or makeshift shelters built without formal approval. In 1972, the government introduced the Small House Policy to grant male indigenous villagers the right to build one small house without paying a land premium. The policy was initially intended as a short-term measure, but it has lasted until now and continues to shape how village housing looks today.

Lots in the New Territories Before the Small House Policy

British rule over the New Territories began with the “Convention for the Extension of Hong Kong Territory” in 1898. At the time, most land was held under private agreements or Qing dynasty deeds, creating a major challenge for the new colonial government: how to recognize and manage these pre-existing claims. To tackle the problem, the government carried out a comprehensive land survey and produced a series of demarcation district sheets. A Land Court was also set up to register ownership claims. The records of this full-scale registration exercise were eventually summarized into schedules and attached to Block Crown Leases. 

However, not all land recorded in the Block Crown Leases was agricultural land. Many lots within walled villages were registered as building land (also known as “old schedule lots”). Although these lots are generally small, the Lease had no restrictions on their development or resale, nor were they subject to later regulations on building size introduced under the Small House Policy. The only condition is that any reconstruction has to be approved by the Lands Department, but even if additional storeys are added, the owner does not need to pay any extra land premium.

From 1905 onwards, any land not recorded in Block Crown Leases was declared Government Land. The District Office later auctioned some of this land to villagers under terms specified in government gazettes between 1906 and 1934. These lots are known as “New Grant Lots”, and were sold under standardized G.N. (Government Notice) Conditions that permitted houses of 2 storeys up to 25 feet in height. Since the terms and conditions placed no restrictions on resale or transfer, owners did not have to pay any land premium for these actions. Unfortunately, all documentation related to the sales agreements on these GN lots were lost during World War II.  New Grant Lots continued to be sold until the 1960s, but standardized G.N. Conditions fell out of use after World War II, so pre-war New Grant Lots are often referred to informally as “G.N. Lots” on the real estate market.  

Some pre-war New Grant Lot houses are still standing. They can be distinguished from traditional pre-colonial village houses by the following features: they often have a larger area than traditional homes, which only occupied “yat fan dei” (1/100 of an acre, 436 square feet), and at a height of 25 feet, were taller than traditional houses with only one storey and a cockloft.

Post-war, the New Territories faced intensifying development pressures as Hong Kong’s population grew rapidly. The government wanted to allow villagers to build homes for themselves but feared that permissive lease conditions would set off an unstoppable wave of land speculation. They therefore dropped outdated requirements for village houses to be built out of traditional materials and for applications to be made only by “bona-fide villagers” since many villagers could no longer trace their ancestry back to 1898, but instead imposed a variety of new conditions stipulating the permitted use, area, and height of homes on newly sold lots. Post-war New Grant Lot houses were increasingly built out of reinforced concrete with flat roofs, and were initially limited to two storeys, though two and a half storeys were tolerated later on.

The introduction of the Small House Policy in 1972 brought in more stringent lease conditions concerning resale and transfer: properties could not be sold for five years, and any transfer required both approval from the District Lands Officer and a land premium.

Temporary homes on Government Land

Across villages in the New Territories, there is another type of house that is not often thought about— the licensed house. These dwellings were built on government land under Crown Land Permits (now called Government Land Licenses), which allowed holders to use the land for agricultural purposes, including farmhouses. To this day, many villagers in the New Territories still live in such homes. 

Licensed houses originated in the 1950s and 1960s, following the Chinese Civil War (1945-49). As a large number of refugees fled south to Hong Kong, both urban and rural  populations grew rapidly, while food and employment opportunities remained scarce. In response, the colonial government permitted refugees to cultivate unleased government land. Land permits were issued by the District Offices in the New Territories, granting refugees permission to farm and reside on these lots.

A government notice posted in Wah Kiu Yat Po in 1957 reminds occupants using government land for cultivation or housing that they must obtain a license; otherwise, they could face charges of illegal occupation. Most of these licensed lots were on the outskirts of villages or in more remote areas since much of the accessible land had already been claimed by indigenous villagers and recorded in the Block Crown Leases during government surveys in the 1900s.

At that time, many of these licensed sites lacked basic infrastructure. A villager from Tai Po Kau’s Kon Hang recalled that most of the land was on steep slopes. Although they were allowed to live and farm here, they had to start from scratch entirely, clearing vegetation and manually levelling the terrain before any construction could begin.

Each Crown Land Permit lists the holder’s personal details and includes a site plan showing the permitted occupation area, the layout of structures, and their designated uses, such as living quarters, livestock sheds, kitchens, or toilets. In general, permit holders were allowed to build a structure no larger than 400 square feet and no higher than 15 feet. Holders have to pay an annual license fee to the government. The land is neither privately owned nor leased under short-term tenancy. Under the Land (Miscellaneous Provisions) Ordinance (Cap. 28), the permit allows the holder “to erect a specified structure of defined dimensions and use on unleased government land for a specified period.” The licence is non-transferable, and the government can revoke it at any time if its conditions are violated. In principle, a licensed house cannot be sold, let, or sublet. It can only be inherited by direct family members.

According to the Audit Commission’s Report No. 68, the government stopped issuing new Crown Land Permits around the mid-1970s. However, as of 2016, more than 15,000 valid land licences still existed across Hong Kong, Kowloon, and the New Territories, scattered across farmland rather than concentrated in specific villages. 

Licensed Houses on Private Land?

However, not all valid land licences are Crown Land Permits (Government Land Licenses). In the New Territories, some licensed houses were actually built on privately owned agricultural land. 

The government permitted farmers to build agricultural buildings including farmhouses on private agricultural land under certain circumstances. For farmhouses, the conditions were similar to those for licensed houses on government land: a maximum footprint of 400 square feet and a height limit of 17 feet. As agricultural leases were not legally intended for housing, farmers had to obtain for a government waiver — a temporary approval that relaxed the usual lease restrictions on the use of agricultural land for buildings. 

According to oral histories shared by villagers, after they had built such houses on private agricultural land, in the 1970s, the colonial government invited them to pay a land premium to convert these tolerated structures into a form of leasehold that permitted them to rent them out.  Some villagers accepted the offer, which explains why some licensed houses stand on private land. 

Today, it is extremely rare to obtain such waivers. Most cases occur as part of agricultural resite policy when farmland is resumed for development. In other words, when farmers displaced by public works projects wish to continue farming and need to build a (temporary) structure on private farmland they rent or buy as a home, they can apply for a waiver through the Lands Department after their identity is verified by the Agriculture, Fisheries and Conservation Department. Examples include Choi Yuen New Village near Shek Kong, formed by villagers affected by the Express Rail Link, and the villages near Heung Yuen Wai, which were relocated to make way for the new border control point.

Scattered across the New Territories, different versions of old village houses and licensed homes stand as quiet witnesses to a century of rural transformation. But as the Northern Metropolis plan progresses, their future becomes more uncertain than ever. For the government, resuming these licensed dwellings is much easier than resuming private land. In the coming years, many licensed houses and farm dwellings, built on government land or existing only by permit, are likely to face large-scale clearance.

References:

Audit Commission, “Report No. 68 – Chapter 3 Management of squatter and licensed structures”, 3 April 2017.

Lou, Yin-yee. “An Analysis of the Small House Policy in Hong Kong.” MA thesis. The University of Hong Kong, (2011).

Survey and Mapping Office, “Lot Index Plan A Quick Reference for Identification of Lots in the New Territories”, Lands Department, February 2025.

〈轉換官地牌照須於月尾辦理〉(“The conversion of Crown Land Permit must be processed by the end of the month”), Wah Kiu Yat Po, 13 February 1957.