BT 20160229 DC 2140264

DC?
Explains
What is
The latest development charge rates will be released by
the government today. Just what are DC rates and to whom
do they matter? Here’s a primer.
BY KALPANA RASHIWALA
We often hear the term “development charge” being This may arise, for instance, from:
mentioned when collective sales are discussed, or when  An increase in the intensity or plot ratio, which
some properties undergo redevelopment. Just what is a means a bigger project, ie with more gross floor area,
development charge (or DC)? may be built on the site or
DC is a tax that is payable by the owner of a property to
the state as a result of the state approving a development  A change of use of the site to a higher-value use.
proposal that will increase the land value. (eg from industrial to residential).
How is DC calculated?
DC is computed based on the difference between development ceiling and development baseline.
DEVELOPMENT CEILING: To determine the value of the development baseline, one

This is the value of the proposed development that has to compare the provisions in the historical 1958 and
has been submitted to the Urban Redevelopment 1980 Master Plans, the 2003 Master Plan, as well as the
Authority (URA) for planning permission. previously approved development in accordance with
certain principles as laid out in the Planning Act.
 If the development ceiling is equal to or less
DEVELOPMENT BASELINE:
than the development baseline, no DC is payable.
This is the value of the approved development for
the site based on the approved use and intensity DC is payable when the development ceiling is
of the site. higher than the development baseline.
State’s share of enhancement in land value How often are

The principle of DC: Since July 18, 2007, DC rates have been pegged at DC rates revised?
The DC system is based DC rates are revised twice a year,
on the principle of
allowing the state to
70% 30% on March 1 and Sept 1. The review
is conducted by the Ministry of
of the is left to the
have a share of the gains freehold owner as an National Development in
from the enhancement land value incentive to consultation with the Chief Valuer,
in land value arising undertake who takes into account the
from its grant of redevelopment prevailing market values in the
planning approval. work
half-yearly review of the rates.
How are DC rates stated?

DC rates are generally expressed in per square metre (psm) of gross floor area (GFA). They are specified according to
use groups across 118 geographical sectors cutting across Singapore. Hence the DC rate is an average value within
a geographical sector. The 118 geographical sectors are covered in two maps on the URA website.
Go to these 2 links for the URA maps. bit.ly/uramapa bit.ly/uramapb
SOME KEY USE GROUPS

AND THE ALLOWED
DEVELOPMENTS*
A B1 B2 C D E
Commercial, eg Landed Non-landed Hotel, hospital Industrial, warehousing, Place of worship,
office, shop, F&B, residential residential business park, transport civic and community
entertainment, clinic facilities (eg MRT station), institution
telecom infrastructure
*list is not exhaustive
Examples on the calculation of development charges
SCENARIO 1
A single-storey bungalow along Upper East Coast, with planning permission obtained in February 2016 for the
redevelopment of the site into a five-storey apartment development with a proposed gross floor area (GFA) of 2,100 sq m.
Use Key development parameters:

groups:  Site area: 1,500 sq m
 2014 Master Plan zoning: Residential at plot ratio 1.4 (Equivalent GFA: 2,100 sq m)
 1980 Master Plan zoning: Residential at plot ratio 0.7 (Equivalent GFA: 1,050 sq m)
 The property is located in Geographical Sector 96.
Corresponding DC rates for this sector as at Sept 1, 2015 are as follows:
Use Group B1 (Landed Residential): S$5,600 psm
Use Group B2 (Non-Landed Residential): S$4,900 psm
DEVELOPMENT CEILING
Proposed GFA (2,100 sq m) X DC rate† (S$4,900 psm) = S$10.29m
DEVELOPMENT BASELINE*
Historical permitted GFA (1,050 sq m) X DC rate† (S$5,600 psm) = S$5.88m
B1: B2:
Landed Non-landed DEVELOPMENT CHARGES
residential residential Development ceiling – Development baseline = S$4.41m
SCENARIO 2
A 3-storey industrial building in Balestier, with necessary approvals obtained for redevelopment
into an apartment project with a plot ratio of 2.8.
Use Key development parameters:

groups:  Site area: 3,000 sq m
 Proposed development: Residential at plot ratio 2.8 (Equivalent GFA: 8,400 sq m)
 Existing approved use and intensity:
Industrial at plot ratio 2.5 (Equivalent GFA: 7,500 sq m)
 The property is located in Geographical Sector 59.
Corresponding DC rates for this sector as at Sept 1, 2015 are as follows:
Use Group B2 (Non-Landed Residential): S$5,460 psm
Use Group D (Industrial): S$1,470 psm
DEVELOPMENT CEILING
Proposed GFA (8,400 sq m) X DC rate† (S$5,460 psm) = S$45.864m
DEVELOPMENT BASELINE*
Approved GFA (7,500 sq m) X DC rate† (S$1,470 psm) = S$11.025m
D: B2:
Industrial Non-landed DEVELOPMENT CHARGES
residential Development ceiling – Development baseline = S$34.839m
*The Development Baseline takes into account the value of value is higher than the approved development of a site, the
the existing approved GFA of the site, the value of the historical development baseline will be the higher of the two values.
1958 and 1980 Master Plans as well as the 2003 Master Plan If the higher of the 1958 or 1980 MP values exceeds the
value based on Sept 1, 2003 DC rates. 2003 Master Plan value, the development baseline will be
In general, when the 1958 or 1980 Master Plan baseline capped at the 2003 level.
Scenario examples prepared by JLL

The above are simplified illustrations on the calculation of development charges.
Readers may refer to URA’s example scenario on how it calculates development charge bit.ly/uraguidelines
†For the site based on its geographical sector number and use group
BT Graphics: Simon Ang, Hyrie Rahmat

BT 20160229 DC 2140264

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DC?

DEVELOPMENT CEILING: To determine the value of the development baseline, one

State’s share of enhancement in land value How often are

How are DC rates stated?

SOME KEY USE GROUPS

Examples on the calculation of development charges

Use Key development parameters:

Use Key development parameters:

Scenario examples prepared by JLL

BT Graphics: Simon Ang, Hyrie Rahmat

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