Revised rates are from September 23, 2022 to February 28, 2023.
Property analyst, Huttons, has advised property developers to reassess their potential bids for block sites after the government changed the rates of land improvement charges (LBC).
The Singapore Land Authority (SLA) has implemented changes to AML tariffs, which take effect from September 23, 2022 to February 28, 2023.
Recently, the bulk business has recovered strongly with eight residential sites and two commercial sites sold. This has resulted in an increase in non-land development charge rates from the March review.
Huttons said Area 113 saw the biggest increase of 20% due to the sale of Lakeside Apartments, Park View Mansions and a government land sale program site at Dairy Farm Walk.
Additionally, Huttons said Sector 93 and Sector 104 “saw adjustments as both sectors each saw two bulk sites sold.”
SLA is also changing the remnant land rate upwards from September 1, which will affect bulk sites that offer to secure remnant land to increase gross floor area.
“As of September 1, all residential, commercial and industrial land whose sale would result in a transfer of gross area, the rate is doubled to 100%. The state takes 100% of the value of the land,” Huttons said.
Other than that, there are revisions to how the gross floor area is calculated, such as the air conditioning ledge being part of the gross floor area.
This is why developer costs can rise and “eat developer margins”.
“Developers may reevaluate potential bids for bulk sites. This may affect the success rate of some bulk sites,” Huttons Asia warned.