Land betterment charges for commercial, residential and industrial uses go up by 0.1% to 1.6% on average
Rates for place of worship, civic and community institution use to rise by 2.9% on average; rates for hotel, hospital, nursing home use to remain unchanged
[SINGAPORE] The government has raised land betterment charge (LBC) rates by 0.1 to 1.6 per cent on average for commercial, residential and industrial use groups for the six months starting Sep 1, 2025.
Developers pay LBC for the right to enhance the use of some sites, or to build bigger projects on them.
LBC rates have also been raised – by about 2.9 per cent on average – for the place of worship, and civic and community institution use group.
However, rates for the hotel, hospital and nursing home use group remain unchanged.
LBC rates are announced twice a year, on Mar 1 and Sep 1, following a review by the Singapore Land Authority (SLA), in consultation with the taxman’s chief valuer (CV).
The rates are based on the CV’s assessment of land values and take into consideration recent land sales.
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LBC rates are stated according to use groups across 118 geographical sectors in Singapore.
In all 118 geographical sectors, LBC rates have been raised for the place of worship, and civic and community institutions use group. The increases range from about 3 to 4 per cent.
The 2.9 per cent increase on average for this use group follows the 5.8 per cent hike in the previous revision on Mar 1, 2025.
“We believe this is a continued gradual adjustment to align with the general real estate sectors, after 10 years of no change,” said Tricia Song, CBRE’s head of research for South-east Asia.
“Latest LBC rates should not dampen developers’ and investors’ confidence in the underlying property market. ”
DR CHUA YANG LIANG OF JLL
Landed and non-landed residential use groups
In the landed residential segment, LBC rates have gone up by 0.4 per cent on average. Thirteen sectors will see increases in LBC rates, ranging from about 3 to 5 per cent. There are no changes for the other 105 sectors.
JLL’s head of research and consultancy for South-east Asia, Chua Yang Liang, said: “Persistent strong upward pressure on the landed housing market has motivated the chief valuer to increase LBC rates across 11 per cent of the sectors islandwide.”
Mogul.sg chief research officer Nicholas Mak noted that geographical sectors 66, 67, 68, 69 and 70 – which include prime Good Class Bungalow locations such as Nassim Road, Gallop Road, Dalvey Road, Ridout Road and Chatsworth Road – are among the areas with increased LBC rates for the landed residential use group.
The rates for non-landed residential use have increased by 0.7 per cent on average. In 19 sectors, the rates have been raised by about 2 to 15 per cent. The rate has been cut for one sector by about 4 per cent; rates for the remaining 98 sectors have been left untouched.
Sector 96, which includes the Bayshore area, posted the biggest jump of 15.4 per cent. Analysts attributed this to the S$1,388 per square foot per plot ratio bid for a state land tender site in March. This was the highest land price for a 99-year private housing site in the suburbs at a state tender.
Sector 104, meanwhile, posted a 9.5 per cent increase in the LBC rate for non-landed housing use, which analysts attribute to the strong showing for the Chuan Grove site state tender last month.
Industrial and commercial segments
In the industrial segment, LBC rates have risen by 1.6 per cent on average. Rates have been upped for 45 sectors, by between 3 and 10 per cent. There are no changes for the other 73 sectors.
Sector 114 posted the biggest hike, of 9.9 per cent, in LBC rates for industrial use.
JLL’s analysis showed this was supported by industrial government land sites in Tukang Innovation Drive, Jalan Papan, Gul Drive and Pioneer Road being sold at prices substantially (10 to 176 per cent) above the land value implied by the Mar 1, 2025, LBC rate for industrial use in the sector.
LBC rates for the commercial use group have increased by 0.1 per cent on average. Rates have gone up in four geographical sectors by about 3 per cent. There are no changes for the remaining 114 sectors.
One of the four sectors, with a 3.3 per cent rate hike, according to JLL’s analysis, is sector 115, which includes the Sembawang and Woodlands area. Analysts attributed this to the Northpoint City South Wing deal.
“There were no reliable transactions for development purposes in the commercial segment,” said JLL’s Dr Chua.
No damper on confidence
Overall, Dr Chua said the latest LBC rates should not have any significant drag on the market trend or dampen developers’ and investors’ confidence in the underlying property market. “LBC primarily affects developments with increased development intensity and land values,” he added.
In a similar vein, Mak said the locations affected by the LBC rate hikes for non-landed residential use are largely in the suburbs. “These will marginally increase the development costs for developers who have not locked in their LBC for their projects based on the previous LBC rates yet,” he said.
“However, no developer will break into a sweat because LBC usually only makes up a small portion of the total project development costs. Furthermore, the developers will be able to pass the higher LBC to the homebuyers through higher housing prices in the current buoyant property market,” he added.
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