Hong Kong, with a GNP per capita in excess of US$24,500 - higher than the United Kingdom and many other European Community countries-is perhaps one of the most exciting and dynamic economies in the world. But the territory's total land mass is relatively small, covering an area of 1092 square kilometres, of which less than 16 per cent is actually developed (fable 3.1). However this area supports a population of over six million people and as Walker (1995) points out, real estate and construction form an important part of the economy - the value of the property stock is about HK$3,300 billion, excluding government buildings. Annual investment in property represents over 60 per cent of all capital investment and about 35 per cent of government expenditure is on property. So it is not surprising that the Hong Kong Government would choose to raise revenue by taxing real property.