The Ministry of National Development (MND) has announced new development charge (DC) rates, or taxes payable on the enhancement in land value for the next six months, with industrial property seeing the highest uptick at 15 percent on average.
“The largest increase of 29.2 percent was seen in Sector 115 (covering areas such as Yishun, Woodlands and North Seletar) where an industrial land parcel was sold for S$161 psf ppr, which is 140.7 percent above the current imputed land value,” said Chia Siew Chuin, Director of Research & Advisory at Colliers International.
Meanwhile, DC rates for landed residential grew an average of seven percent. The highest increase of 13 percent applies to 13 geographical sectors, while the rates for 42 other sectors were left unchanged.
As for non-landed residential, DC rates rose by an average of five percent, with the hike ranging between five and 28 percent in 53 out of 118 sectors.
DC rates for the remaining 65 sectors are unchanged, while the biggest increase of 28 percent applies to Sector 74 (Kim Tian Road/Tiong Bahru Road/Bukit Ho Swee Link/Zion Road/Outram Road/CTE/Jalan Bukit Merah area).
“Although the adjustment is higher than market expectations, if we look at the overall trend, (the) Chief Valuer seems to have taken this opportunity to close the gap in land values between asset classes,” noted Dr Chua Yang Liang, Research Head at Jones Lang LaSalle.
Meanwhile, the DC rates for commercial and hospital/hotel use, as well as four other use groups remain untouched.
Moving forward, the latest changes are not expected to significantly affect residential en bloc sales considering that “the level of activity in the collective sales market is subdued”, said Chia.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email firstname.lastname@example.org