New charge under Land Betterment Charge Act 2021 replaces development charge, temporary development levy and differential premium

28 July 2022

The Land Betterment Charge Act 2021 (“Act”), which introduces a tax called the land betterment charge (“LBC”), will come into force on 1 August 2022. The LBC will consolidate the collection of charges for the enhancement of land value under a single agency, the Singapore Land Authority (“SLA”).

The LBC is a tax on the increase in value of land resulting from a chargeable consent given in relation to the land. It ensures the return to the community, as set out in section 5 of the Act, of an appropriate amount or proportion of economic benefit from the grant of rights to develop or otherwise use land. The money collected as LBC can then be used to fund a wide range of infrastructure development and public programmes undertaken by the Government.

Currently, landowners and developers have to apply to SLA for the payment of differential premiums (“DP”), and separately to the Urban Redevelopment Authority (“URA”) for the payment of development charges (“DC”) or the temporary development levy (“TDL”) for proposals which result in an enhancement in land value. This Act provides for a single LBC to replace the DC, TDL and DP. The principles for computing LBC follow the DP and DC systems, known as the Table of Rates method.

As a new service to landowners, the baseline information (i.e. the use and intensity for determining pre-chargeable valuation) for all land parcels will be progressively made available on SLA’s Integrated Land Service (INLIS) website. This will allow landowners to estimate the amount of LBC payable upfront. The process will be simpler for landowners as they no longer have to conduct multiple checks with SLA and URA on the different charges that they have to pay.

More information about the LBC can be found at the SLA webpage on Lease Management and in the SLA circular on “Land Betterment Charge arising from Planning Applications and/or Involving Lifting of Restrictive Covenants”.

Reference materials

The SLA press release and circular relating to the land betterment charge is available on the SLA website www.sla.gov.sg.