Development charges for non-landed housing raised to 13.8%

With the chief value discussion, the development charge (DC) rates for the non-landed housing, commercial space and landed residential have been amended upwards for the term of September 1, 2017 up to February 28, 2018, noted by the Ministry of National Development last August 31 (Friday).

Development charge is a tax that developers required to pay if they want to build developments that strengthen land value, such as rising the plot ratio as well as rezoning the location for other uses.

Above all, the development charge rates for the non-landed residential projects (Use Group B2) were elevated by 13.8% on average. 116 further than 118 geographical areas recorded rises of 6% to 29%, with sector 100 comprising of Hougang, Tampines Road, Sengkang and Punggol viewing the greatest increase. Instead, the rates for the 2 outstanding sectors were unaffected.

As said by Tay Huey Ying, the head of research at JLL, the 13.8% hike was the sharpest upward change for the non-landed residential section considering the first development charge rate rise happened in September 2016.

“This is within our prospects as there has been a point in petition for residential development land. Annually, over $7 billion cost of residential development spots in the private and public domains have altered hands, exceeding the $4.32 billion total for the entire year of 2016.” One issue behind this, is the active en bloc market, that is estimated for approximately two-fifths of overall sales hitherto this year.

For the landed residential (Use Group B1), the development charge rates have raised by 0.3% on average. 5 beyond 118 sectors have seen surges of seven percent up to nine percent, whereas that for the outstanding 113 sectors were unmoved. The largest increase was noted by sector 100, which includes Hougang, Tampines Road, Sengkang and Punggol as well.

In the meantime, the development charge rates for the commercial space (Use Group A) ascended by 3.8% on average. 59 beyond the 118 sectors have forwarded upticks of between 3% and 11%, with areas 101, 113, 114 and 115 posting the highest progresses. These areas consist of Jurong West, Paya Lebar Road and Woodlands.

Tay have confidence in that the higher development charge rates follows the chief valuer’s positive viewpoint for the Singapore property market in the following six months.

“(It) gives a solid hint of what can be projected for the growing areas of Jurong Lake District, Paya Lebar, Woodlands North Coast, Jurong Innovation District as well as Kallang River/ Kallang,” she mentioned.

The development charges rates for all various use groups, including industry,  hospitals and hotels and places of worship, stay unchanged.