Land betterment charge rates marginally increased for residential properties

The Singapore Land Authority (SLA) has revealed the modification of land betterment charge (LBC) rates from March 1 to Aug 31. The review is executed half-yearly in discussion with the head valuer of the Inland Revenue Authority of Singapore.

For the landed home purpose group, ordinary LBC premiums boosted by 0.4% (versus an increase of 10.2% in September 2022). Twelve sectors saw rises varying from 3% to 4%, although the standing 106 sectors saw no change.

Several use groups saw LBC rates unchanged, consisting of commercial and industrial use groups, while home, in addition to the inn as well as health center use groups saw marginal increases.

Sector 97 (covering Bedok South Avenue, New Upper Changi Road, Bedok Road plus Upper East Coast Roadway) noticed the largest increase of 5%. “The head valuer most likely connected the uplift in land values to the collective sale of Bagnall Court early on this year, as well as the news of even more focused green spaces in the Bayshore precinct, which will improve the liveability of housing spaces,” says Lam Chern Woon, Edmund Tie’s head of research and consulting.

Discussing the unaltered LBC prices for business real estates, CBRE’s Song observes this complies with the lack of expensive office purchases out there. She adds:” We believe this signifies the authorities’s view of the flexibility of commercial property worths, in spite of much higher funding costs and also macroeconomic unpredictabilities.”

LBC fees for the resort and also hospitality group were elevated by 1% on average, the initial rise carried out as March 2019, adds Edmund Connection’s Lam. Eighteen out of the 118 sectors saw an increase in LBC prices ranging from 4% to 10%, with the remaining 100 sectors finding no change.

Tricia Song, head of research, Southeast Asia at CBRE, includes that sectors that saw rises were those that have actually found a shared sale or Government Land Sale (GLS) tenders.

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JLL’s Tay believes weak production efficiency is most likely factored right into the choice to keep LBC rates unmodified for industrial estates. Manufacturing outcome growth slowed to 1.1% y-o-y in 3Q2022 and contracted by 2.6% y-o-y in 4Q2022, ending nine consecutive previous quarters of growth. Tay adds that the most up to date LBC review could have also considered the “tepid interest” seen for industrial state land sale plots coming before the evaluation.

The tiny revision for this user group lines up with the stabilizing price growth observed for landed houses alongside reducing sales activity, states Tay Huey Ying, head of research and also consultancy, Singapore at JLL. Caveats lodged for landed houses for the last six months fell by nearly 50% from the preceding duration, while URA’s price index for landed homes boosted by just 0.6% q-o-q in 4Q2022, compared to a quarterly standard of 2.3% in 2Q2022 and 3Q2022.

Sectors with the biggest increases consist of sector 99 (Pasir Ris, Loyang, and Changi), sector 100 (Tampines Roadway, Hougang, Punggol including Sengkang), and sector 58 (Bukit Timah, Central Expressway, Balestier Road, Tessensohn Road furthermore Race Course Road).

For the residential, non-landed use group, LBC prices increased by 0.3% generally, a sharp comparison from the 12.9% increase throughout the last review in September 2022. Thirteen out of 118 geographical sectors saw upwards alterations, which ranged from 2% to 5%, while the remaining 105 sectors saw no improvement.

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