Page 1 of 2 12 LastLast
Results 1 to 10 of 19

Thread: Govt raises development charge from 50% to 70%

  1. #1
    Any complaints please PM me
    Join Date
    May 2006
    Posts
    8,129

    Default Govt raises development charge from 50% to 70%

    Govt raises development charge from 50% to 70%

    Wed, Jul 18, 2007

    AsiaOne


    The government will revise the Development Charge (DC) for new building projects from 50 per cent to 70 per cent, in line with the buoyant property market.

    The revised rates, which come into immediate effect, will apply to development applications where provisional permission is issued from today.

    They will also apply to cases that are granted a second or subsequent extension to their provisional permission on or after this operative date.

    A statement from the National Development Ministry today said the DC rates have been revised to reflect the appreciation in land value, and is a reinstatement of what it was in 1985.

    The government reduced the DC from 70 per cent to 50 per cent in 1985 to avoid eroding the share of value enhancement to the developers in the then declining market due to the recession.

    "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 per cent," said the ministry statement.

    DC rates are set baced on the principle of sharing of enhanced land value. Currently, they are pegged at 50 per cent of the enhancement of value.

    The current formula is based on an adjustment made during the 1985 recession.

    The DC is levied when the land value of a site can be enhanced due to the government's rezoning of 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.

    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.

    The ministry statement says 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 70 per cent.

  2. #2
    Unregistered
    Guest

    Default Re: Govt raises development charge from 50% to 70%

    This will make newlaunch even more expensive???

  3. #3
    Unregistered
    Guest

    Default Re: Govt raises development charge from 50% to 70%

    Quote Originally Posted by Unregistered
    This will make newlaunch even more expensive???
    This may put a stop on the "irrational exuberance" behaviour on enbloc. Hope the price of those old and run down condos can go down to where it suppose to be soon. For those who bought those old condos with sky high prices, I guess you know it you were speculating, not investing and as such, I supposed you are very prepared to lose big times.

  4. #4
    Unregistered
    Guest

    Default Re: Govt raises development charge from 50% to 70%

    think this new news will kill all the enbloc in the suburbs. This is in line with the government supply side initiative where they want to control price rise in the suburbs to keep the man In the street happy. Increase developlment charge prob would not stop enbloc in prime areas where selling price of new projects is far higher than enbloc price + development charge. But in the suburbs like east esp the 99 years one with a high development charge the developers might as el go bid for land in the goverment land sales programme.

  5. #5
    Any complaints please PM me
    Join Date
    May 2006
    Posts
    8,129

    Default Re: Govt raises development charge from 50% to 70%

    MND announces revision in development charge rates

    Posted: 18 July 2007 1428 hrs


    SINGAPORE: The Ministry of National Development has announced that development charge rates will be revised from the current 50 per cent of the appreciation in land value to 70 per cent.

    The revised rates take effect immediately and apply to development applications where provisional permission is issued on or after 18 July.

    The statement added that the development charge was lowered from 70 per cent to 50 per cent in 1985 to avoid eroding the share of value enhancement that accrued to developers in a declining market.

    But with the current buoyant property market, the government has decided to reinstate the development charge to its original rate of 70 percent.

    For land with title restrictions on the use and intensity, which are subjected to a levy of differential premium by the Singapore Land Authority, the differential premium will be similarly adjusted to the 70 per cent rate based on the published table of development charge rates.

    - CNA/yy

  6. #6
    Any complaints please PM me
    Join Date
    May 2006
    Posts
    8,129

    Default Re: Govt raises development charge from 50% to 70%

    July 18, 2007

    Development charge for new buildings up to 70%


    THE government has raised the Development Charge (DC) for new building projects to 70 per cent from 50 per cent.

    The revised rates will apply to development applications where provisional permission is issued from Wednesday.

    They will also apply to cases that are granted a second or subsequent extension to their provisional permission on or after this operative date.

    A statement from the National Development Ministry (MND) on Wednesday said the DC rates have been revised to reflect the appreciation in land value, and is a reinstatement of what it was in 1985.

    For land with title restrictions on the use and intensity, which are subject to a levy of Differential Premium by the Singapore Land Authority, it will similarly be adjusted to the 70% rate.

    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.

    The portion of the gain taxed by the government can then be used to offset expenditure on infrastructure movements, such as road and rail works, as well as utilities, to support the higher land zoning or intensification of land.

    The balance of the gain is retained by the owner and provides and incentive for him to undertake the development work.

  7. #7
    Any complaints please PM me
    Join Date
    May 2006
    Posts
    8,129

    Default Re: Govt raises development charge from 50% to 70%

    18 July 2007

    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%.

    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)

    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.

    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 Development Charge rates

    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%.

    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.

    For media enquiries, please contact Ms Ang Hwee Suan of URA at Tel: 63218134 on DC matters and Ms Susan Koh of SLA at Tel: 63238105 on Differential Premium matters.

    Issued by the Ministry of National Development

    For media enquiries, please contact:

    Ms Gillian Tan
    Manager, Public Relations
    DID: 6321 8280
    Email: [email protected]

  8. #8
    Unregistered
    Guest

    Default Re: Govt raises development charge from 50% to 70%

    Quote Originally Posted by Unregistered
    This will make newlaunch even more expensive???
    So existihg property prices will go up with this measure!

  9. #9
    Unregistered
    Guest

    Default Re: Govt raises development charge from 50% to 70%

    Quote Originally Posted by Unregistered
    So existihg property prices will go up with this measure!
    Probably not because the measure will make it riskier for developer to buy en-bloc at a higher price. So less enbloc (except maybe prime areas) and the property market will cool down. It's like putting a capital gain tax on flippers, and this will stop some flippers from even thinking of flipping because it is too risky. When the market goes down, you stand to lose much more - can bankrupt the developer.

  10. #10
    Unregistered
    Guest

    Default Re: Govt raises development charge from 50% to 70%

    can someone give an example of how this raises the cost to developers?

Page 1 of 2 12 LastLast

Similar Threads

  1. Development charge for Lentor Area
    By stl67 in forum Landed Property
    Replies: 0
    -: 14-04-12, 14:42
  2. Govt revises development charge rates selectively by between 2 & 4%
    By mr funny in forum En Bloc Discussion and News
    Replies: 3
    -: 02-09-09, 02:11
  3. Govt raises GDP forecast
    By mr funny in forum HDB, EC, commercial and industrial property discussion
    Replies: 1
    -: 15-07-09, 14:42
  4. Huh? What's a development charge?
    By mr funny in forum En Bloc Discussion and News
    Replies: 0
    -: 31-08-08, 16:04
  5. Govt's move to raise development charge will slow en bloc sales
    By ahlahdin in forum En Bloc Discussion and News
    Replies: 0
    -: 18-07-07, 23:31

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •