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Press
Releases
Revision of Development Charge (DC)
The
Ministry of National Development announced today that the
Development Charge (DC) rates will be revised from the current
50% of the appreciation in land value to 70%.
2
The revised rates will be effective from 18 July 2007 and
will apply to development applications where Provisional Permission
is issued on or after this date. They will also apply to cases
that are granted a second or subsequent extension to their
Provisional Permission on or after this operative date.
Principle
of Development Charge (DC)
3
The land value of a site can be enhanced due to the Government’s
action in rezoning the site to a higher value use or increasing
the plot ratio. The DC system, where a part of the enhancement
in land value is taxed, allows the State to have a share of
the gains from the value enhancement arising from its grant
of planning approval.
4
The portion of the gain taxed by the Government can then be
used to offset expenditure on infrastructure improvements,
such as road and rail works, and utilities, to support the
higher land zoning or intensification of land. The balance
of the gain is retained by the owner and provides an incentive
for him to undertake the development work.
Revision
of the DC rates
5
DC rates are set based on the principle of sharing of enhanced
land value. Currently, DC rates are pegged at 50% of the enhancement
of value. The current sharing formula of 50/50 is a result
of an adjustment made during the recession in 1985. The DC
was lowered from 70% to 50% in 1985 to avoid eroding the share
of value enhancement that accrued to developers in a declining
market. With the current buoyant property market, the converse
is true. Thus, the Government has decided to reinstate the
DC to its original rate at 70%.
6
For land with title restrictions on the use and intensity,
which are subject to a levy of Differential Premium by the
Singapore Land Authority, the Differential Premium will similarly
be adjusted to the 70% rate based on the published
Table of DC rates.
7
For media enquiries, please contact Ms Ang Hwee Suan of URA
at Tel: 63218134 or Ms Gillian Tan of URA at Tel: 63218280
on DC matters and Ms Susan Koh of SLA at Tel: 63238105 on
Differential Premium matters.
| Issued
by |
: |
Ministry
of National Development |
| |
|
|
| Date
|
:
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18
Jul 2007 |
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