Developers (General) : Development Charges & Differential Premium

Q1: What is the Development Charge?
Q2: How would I know if I have to pay Development Charge or Differential Premium?
Q3: Who pays the Development Charge?
Q4: How is the Development Charge calculated?
Q5: How often is the Development Charge Table reviewed?
Q6: Are there any alternatives available to me if I am dissatisfied with the Development Charge determined by the Fixed rate method?
Q7: Can I appeal against the Development Charge determined?
Q8: If I have opted for the case-by-case valuation system. However, I am still unhappy with the charges I have to pay, can I request for a revision using the fixed rate system?
Q9: What types of development may be exempted from payment of Development Charge?
Q10: What is the material date for Development Change computation?
Q11: What is Differential Premium?
Q12: How is Differential Premium calculated?
Q13: What are the statutory documents related to development charges?
Q1: What is Development Charge?

Development Charge is a "levy" that is imposed when planning permission is granted to carry out development on a site for a more valuable zoning use or in excess of the existing plot ratio i.e. higher density.

Q2: How would I know if I have to pay Development Charge or Differential Premium?

You would have to pay Development Charge if you want to enhance the value of freehold land. Differential Premium is payable when you want to enhance the value of leasehold land.

Q3: Who pays the Development Charge?

The owner of the land or the applicant for the planning permission is liable for payment.

Q4: How is the Development Charge calculated?
It may be calculated in two ways:
a) Fixed rate Development Charge- the amount payable is computed at the date of provisional permission by reference to the rates for different land use groups according to geographical areas (Development Charge Table):
Development Charge = Development Ceiling - Development Baseline
  Development Ceiling is the proposed total GFA multiply by the Rate in the appropriate use group under the appropriate sector in which the development is located.
   

Development Baseline is the highest value of the following:

Rates in the appropriate use group under the appropriate sector in which the development is located multiply by:

(a) for which the land was allocated in the 1958 Master Plan;

(b) for which the land was allocated in the 1980 Master Plan;

(c) any development of that land which -

   

(i) development charge, where payable, has been paid

   

(ii) no development charge is payable by reason of nay exemption under the Planning Act; and

   

(iii) development charge is not payable under the written law in force when WP was granted

   

(iv) last approved GFA (for cases approved before 1 Sep 1989, the last approved GFA for certain category of cases e.g. commercial or mixed use development has to be re-computed based on the 1993 GFA definition)

b) Case-by-case valuation
 
Q5: How often is the Development Charge Table reviewed?

It is reviewed every six months, in March and September of each year.

Q6: Are there any alternatives available to me if I am dissatisfied with the Development Charge determined by the Fixed rate method?

Yes. You may request the Competent Authority to determine the Development Charge on a case by case valuation of the land value enhancement. However, this must be done within 14 days of the Interim Order being served on you.

Q7: Can I appeal against the Development Charge determined?

Yes, you can do so if the DC was determined using the case-by-case valuation approach. You cannot appeal if the fixed rate system was used to determine DC.

Q8: If I have opted for the case-by-case valuation system. However, I am still unhappy with the charges I have to pay, can I request for a revision using the fixed rate system?

No. Once you have chosen the case-by-case basis to determine the Development Charge, you cannot revert to the fixed rate system. However, you may abort the first application for planning permission, and reapply for a new planning permission.

Q9: What types of development may be exempted from payment of Development Charge?
The following forms of development or property projects are exempted from payment of Development Charge:
a) Buildings under conservation
b) Dwelling houses within a landed housing development that cannot be subdivided
c) Conversion of "industrial" land in Hillview and Bukit Timah areas for residential development
d) Erection or extention to any single detached, semi-detached, linked or terrace house
e) Conversion from net plot ratio as per 1958 and 1985 Master Plan to gross plot ratio
f) Land sold by the government or by a statutory board
Q10: What is the material date for Development Change computation?

The material date is either Provisional Permission (PP) date; or 2nd or subsequent PP entention date - by Planning (Development Charges) (Amendment) Rules 1996.

For example, the PP date for project X is Mar 1999, the first extention date is Sep 1999, the second extention date is Oct 2000, the result is:

1 st Extention : Yr' 99 DC rates applies
2 nd Extention : Yr' Sep 00 DC rates applies
 
Q11: What is Differential Premium?
It is a "levy" payable by a lessee of State land who wishes to top up his lease or remove any restrictive covenant imposed by the lease.
Q12: How is Differential Premium calculated?

It is computed as the difference between the "before" value and "after" value of the site.

For example, to top-up a lease from 80 years (remaining period) to 99 years would mean that the 80-year lease is the "before value" and the 99-year lease is the "after value".

Q13: What are the statutory documents related to development charges?

They are: The Planning Act (Cap 232, 1998 Ed) (Sections 35-40) and The Planning (Development Charge) Rules 2000.