Development charges for non-landed housing up 13.8%

Romesh Navaratnarajah4 Sep 2017

There has been a spike in demand for residential development land in Singapore, contributing to the hike in development charges.

In consultation with the chief valuer, the development charge (DC) rates for landed residential, non-landed housing and commercial space have been revised upwards for the period of 1 September 2017 to 28 February 2018, the Ministry of National Development said last Friday (31 August).

DC is a tax that developers need to pay when they want to build projects that intensify land value, such as increasing the plot ratio and rezoning the site for other uses.

In particular, the DC rates for non-landed residential properties (Use Group B2) were raised by 13.8 percent on average. 116 out of 118 geographical sectors recorded increases of six percent to 29 percent, with sector 100 consisting of Tampines Road, Hougang, Punggol and Sengkang seeing the biggest increase. On the other hand, the rates for the two remaining sectors were unchanged.

According to JLL’s research head Tay Huey Ying, the 13.8 percent hike was the steepest upward adjustment for the non-landed residential segment since the first DC rate increase occurred in September 2016.

“This is within our expectations as there has been a spike in demand for residential development land. Year-to-date, over $7 billion worth of residential development sites in the public and private domains have changed hands, surpassing the $4.32 billion amassed for the whole of 2016.” One factor behind this is the active en bloc market, which accounted for nearly two-fifths of total sales so far this year.

SEE ALSO: Why the hype around properties with en-bloc potential?

For landed residential (Use Group B1), DC rates have increased by 0.3 percent on average. Five out of 118 sectors have witnessed increases of seven to nine percent, while that for the remaining 113 sectors were unchanged. The largest gain was recorded by sector 100, which comprises Tampines Road, Hougang, Punggol and Sengkang.

Meanwhile, the DC rates for commercial space (Use Group A) climbed by 3.8 percent on average. 59 out of the 118 sectors have posted upticks of between three percent and 11 percent, with sectors 101, 113, 114 and 115 posting the largest growths. These areas include Paya Lebar Road, Jurong West and Woodlands.

Tay believes that the higher DC rates reflects the chief valuer’s optimistic outlook for the Singapore property market in the next six months.

“(It) gives a strong hint of what can be expected for the growth areas of Paya Lebar, Jurong Lake District, Jurong Innovation District, Woodlands North Coast and Kallang River/Kallang,” she noted.


Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email


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