Under the current ex-gratia compensation system, landowners are categorized under four zones.

Zones A to D differentiate landowners based on factors such as whether their sites are slated for residential development or use as a public facility.

However, the Development Bureau yesterday said the four zones will be merged into two - tier one and tier two.

Owners of land required for development - such as for residential purposes - will be in the tier-one zone.

The tier-two zone will encompass owners of sites required for nondevelopment uses, including land contracted for rural improvement and conservation. These landowners will receive half the compensation rate of those in the tier-one zone.

A bureau spokesman said under the two-tier framework, owners of resumed land located outside new development areas stand to benefit.

They will now receive a compensation rate 60-percent higher than they did under the previous four-zone system.

Additionally, owners of resumed land for nondevelopment purposes will receive a rate 20-percent higher than their previous sum.

Outdoor business owners will also profit from the new policies as the bureau plans to loosen restrictions surrounding their ex-gratia allowances.

"This round of enhancement measures serve to support the existing system and is important for future land resumption, clearance and development work," the spokesman said.

On Tuesday, the bureau will brief the Legislative Council's development panel. It will also seek approval from the finance committee next month at the latest.

Democratic Alliance for the Betterment and Progress of Hong Kong lawmaker Lau Kwok-fan welcomed the proposals, saying it can speed up land supply.

Beyond systemic reforms, authorities also revised the regular adjustment formula for zonal rates.

Starting yesterday, the compensation rate for rural landowners will be raised from HK$1,302 to HK$1,510 per square foot while the rate for owners of building lands - land with residential property - will increase from HK$2,583 to HK$2,995 per sq ft.