Secretary for Housing Winnie Ho on Saturday said the government is confident of passing a law change this legislative session making serious misuse of public housing a crime.

Under the proposed amendments to the Housing Ordinance, people who break the rules - such as subletting units or using them for business without living there - can face fines of up to HK$500,000 and jail terms of up to a year.

Currently, the toughest punishment for rule-breakers is eviction.

Speaking on a Commercial Radio programme, Ho gave some examples of what might qualify as serious misuse.

“For example, one unit had lots of mirrors installed and was used as a dance studio. And we found a unit which had fitness equipment in which the tenant was training gym-goers. In these situations, people aren't living there, and they're using public housing to make money, so we class this as serious misuse of public housing,” she said.

Ho said the administration would look at each instance on a case-by-case basis, and would be reasonable and compassionate in enforcing the law.

For example, residents who hold small-scale tutorial classes for money, or make handcrafts for online businesses might not be seen as seriously misusing their units, the housing minister said.

She added that the administration had held talks with major parties and received their support.

The Legco's panel on housing is scheduled to discuss the legislation change next month.

Meanwhile, the cash reward scheme for people who want to report illegal public housing use kicked off on Wednesday.

Ho said about 200 reports had been submitted in the last two days, although one-fourth of informants didn’t want the reward, and there were some false claims.

She estimated there would be about 1,300 successful reports this year, with authorities giving out more than HK$4 million in cash.