Ministry of National Development Revision of Development Charge


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
:
18 Jul 2007