Land betterment charge rates marginally increased for residential properties

SINGAPORE  – Announced by the Singapore Land Authority (SLA) was the revised land betterment charge (LBC) rates from March 1 to Aug 31. The review is implemented out once every half year in consultation with the chief valuer of the IRAS.

Most users including commercial and industrial use groups see no changes in that, while residential, along with the hotel and hospital use groups saw marginal increases.

For the residential, non-landed use group, LBC rates increased by zero point three percent on average, a sharp contrast from the 12.9% hike during the last review in September 2K22. Thirteen out of one hundred and eighteen geographical sectors saw an increment in rates, which ranged from two to five percent while the remaining one zero five sectors remain unchanged.

Sector 97 (spanning Bedok South Avenue, New Upper Changi Road, Bedok Road and Upper East Coast Road) saw the most significant upward of 5%. “The chief valuer probably attributed the uplift in land values to the collective sale of Bagnall Court earlier this year, as well as the announcement of more targeted green spaces in the Bayshore precinct, which will improve the liveability of residential spaces,” says Lam Chern Woon, Edmund Tie’s head of research and consulting.

Tricia Song, head of research, Southeast Asia at CBRE, adds that other sectors that saw increases were those that have seen a collective sale or Government Land Sale (GLS) tenders.

For the landed houses, average land betterment charge rates increased by 0.4% (versus a hike of 10.2% in September 2022). Twelve sectors saw increases ranging from 3% to 4%, while the remaining 106 sectors saw no change.

Sectors with the largest increases include sector 99 (Pasir Ris, Loyang, and Changi), sector 100 (Tampines Road, Hougang, Punggol and Sengkang), and sector 58 (Bukit Timah, Central Expressway, Balestier Road, Tessensohn Road and Race Course Road).

The small revision for this user group aligns with the stabilising price growth observed for landed homes alongside slowing sales activity, says Tay Huey Ying, head of research and consultancy, Singapore at JLL. Caveats lodged for landed homes for the last six months fell by nearly 50% from the preceding period, while URA’s price index for landed homes increased by just 0.6% q-o-q in 4Q2022, compared to a quarterly average of 2.3% in 2Q2K22 and 3Q2K22.

LBC rates for the hotel and hospitality group were raised by 1% on average, the first increase implemented since March twenty-19, adds Edmund Tie’s Lam. Eighteen out of the 118 sectors saw an increase in LBC rates ranging from 4% to 10%, with the remaining 100 sectors seeing no change.

The Sora singapore

Terra Hill Blossoms By The Park

The Botany at Dairy Farm The Hill @ One-North The Reserve Residences

Voicing out of the unchanged LBC rates for commercial properties, CBRE’s Song observes this follows the absence of big-ticket office transactions in the market. She commented: “ We believe this signals the government’s view of the resilience of commercial property values, despite more expensive financing costs and macroeconomic uncertainties.”

JLL’s Tay believes weaker manufacturing performance is likely factored into the decision to keep LBC rates unchanged for industrial properties. Manufacturing output growth slowed to 1.1% y-o-y in 3Q2k22 and contracted by 2.6% y-o-y in 4quarter2k22, ending nine consecutive prior quarters of expansion. Tay adds that the latest LBC review could have also considered the “tepid interest” seen for industrial government land sale plots preceding the review.

The Sora showflat location

Add Comment

error: Content is protected !!