A REFINEMENT OF THE PRESENT SINGAPORE DEVELOPMENT CHARGE

Abstract

Development Charge is a Levy imposed an any alteration or addition to the Master Plan to a higher use. It was introduced in 1964 but interest in it only arose after the inception of the Planning (Development Charges) Rules 1980. The main contentions were: 1. The flat, rate of 70%. 2. The basis of valuation and 3. The Appeal System. Although many methods were used in the valuation for development charge, not a single one was perfect and has certain limitations. But the residual method although not very well received. gives some hope for a more perfect method. As a form of tax, it has not been very fair and equitable. It was unable to discriminate between the benefit accruing to the developer. This has led to the greater demand for a certain type of land than another. The effect of the charge on the feasibility of projects is very significant. Many developers were not willing to meet the huge sum payable and as a result, many multi—million dollar projects were either suspended or shelved. The charge has been blamed for pushing up land values and property prices. This is the result of developers being able to push the development charge to the end- purchaser. It is praiseworthy that the Government had been receptive and flexible to criticisms but it is time to do a rethink on the system especially in this market downturn. This will not only lessen the burden on developers but help to achieve the objectives of the system.