Land betterment charge rates cut for non-landed residential use

Subdued bids for GLS plots have taken a toll; rates for other key use groups to rise at slower pace

- Grace Leong

Senior Correspondent Subdued bids for Government Land Sales (GLS) plots have taken a toll on land betterment charge (LBC) rates for non-landed residential use, which will drop for the next half year, while those for other key use groups - landed residential, commercial and hotels will grow at a slower pace.

These recent changes reflect the underlying weakness in the Singapore property market, Dr Chua Yang Liang, JLL's head of research and consultancy for South-east Asia, said. But he pointed to green shoots in the commercial and hospitality sectors, which has seen some growth in underlying land values.

Developers pay an LBC for the right to enhance the use of some sites or to build bigger projects on them.

The latest LBC rates for the Sept 1, 2024, to Feb 28, 2025, period were announced on Aug 30, following a review by the Singapore Land Authority in consultation with the taxman's chief valuer.

The LBC rates are based on the chief valuer's assessment of land values and take into consideration recent land sales.

For non-landed residential use, LBC rates will drop 5.4 per cent on average after edging up by an average of 0.1 per cent in the previous revision period from March 1 to Aug 31, 2024.

"Overhanging property cooling measures, a high interest rate environment, and rising geopolitical risks have resulted in a loss in investors' and developers' appetite," Dr Chua said.