The Land Betterment Charge Bill (“Bill”) was passed by Parliament on 10 May 2021. The Bill provides for the imposition of a new land betterment charge (“LBC”), which is a tax on the increase in land value resulting from a “chargeable consent” given in relation to the land.
The money collected as LBC can be used by the Government to fund infrastructure development and public programmes. In this connection, the collection of LBC is intended to ensure that an appropriate proportion of the economic benefits from the grant of rights to develop or otherwise use land will be returned to the community.
The Bill was gazetted on 8 June 2021 but the Land Betterment Charge Act will only come into effect on a date to be notified in the Gazette. In the meantime, the various charges that currently apply to the development of land (i.e., (a) development charge (“DC”) or temporary development levy (“TDL”) collected by the Urban Redevelopment Authority under the Planning Act; and (b) differential premium (“DP”) collected by the Singapore Land Authority (“SLA”) upon the lifting of restrictive covenants in State titles) will continue to apply.
When the LBC comes into effect, it will replace the DC, TDL and DP and in so doing, consolidate the collection of all such charges for land development under the SLA. The Bill also aims to provide certainty in the process of determining the charge payable by making reference to fixed formulae and a table of rates in the large majority of cases where no valuations are required. This will allow LBC to be determined upfront for most cases, hence reducing overall project risk for landowners and developers. It is therefore anticipated that the LBC will provide greater transparency for landowners and developers and simplify the process of tax collection. There is a separate method for assessing the amount of LBC by way of valuation of the enhancement in land value. This will apply where a taxable person chooses this method or in cases where the table of rates might not be applicable.
If you would like information or assistance on the above or any other area of law, you may wish to contact the Partner at WongPartnership whom you normally deal with or any of the following Partners:
Dorothy Marie NG
Head – Corporate Real Estate
d +65 6416 2408
e dorothymarie.ng@wongpartnership.com
Click here to see Dorothy’s CV.
Monica YIP
Partner – Corporate Real Estate
d +65 6416 8208
e monica.yip@wongpartnership.com
Click here to see Monica's CV.