Gov’t Updates Calculation Of Remnant Land Price
SINGAPORE – The government has updated the charging framework for buying state remnant land to better reflect the economic value that landowners can obtain from combining remnant land plots with their adjacent private land, announced the Singapore Land Authority (SLA) on Wednesday afternoon (31 August, SGT).
Notably, remnant land parcels are state-owned sites that are incapable of being developed on their own because of their small size and/or irregular shape, but they have the potential to increase the economic value and enhance the usage of adjoining lands if they are amalgamated.
Previously, the rate for remnant land plots was based on half of the land value, determined by applying a factor of 5/7 to the applicable Land Betterment Charge (LBC) rate.
But starting from 1 September 2022, its selling price will be valued based on 100 percent of the land value for residential, commercial, and industrial uses, as well as for transactions resulting in a gross floor area (GFA) transfer.
For land used as a place of worship and for civic and community institution use, the selling price of state-owned remnant land will continue to be valued based on 50 percent of the land value.
But if the acquisition of a remnant land will result in a significant increase in the value of a neighboring private land if they are combined, these will be considered as remnant lands with synergistic value.
The rate for remnant lands with synergistic value will be based on the higher of: half of the enhancement in land value of the combined site as assessed by the Chief Valuer, or 100 percent of the land value determined by applying the factor of 10/7 to the applicable LBC rate.
Examples of remnant lands with synergistic value are those government sites that will allow adjacent private land to achieve a higher gross plot ratio, or enable an irregularly-shaped private land to be redeveloped into a project with a standard plot size.
For purchase applications for remnant land submitted prior to 1 September 2022, these will be processed based on the previous charging framework. SLA said it reserves the right in all cases to determine the land premium payable in consultation with the Chief Valuer. This can occur in situations where the land usage doesn’t fit clearly in any of the existing use groups, or where the remnant land is deemed to have synergistic value.