Source : The Sunday Times, August 31, 2008
Where do you see this?
Mainly when a plot of land that is already built on is sold to be redeveloped, such as in a collective sale of an existing estate.
What does it mean?
When a developer buys a site for redevelopment, it will submit a proposal to the Government to build a new development on the land that will have a higher value.
If the Government approves this proposal, it will tax the developer on the enhancement in the value of the land plot resulting from this redevelopment.
This tax is the development charge.
Why is it important?
The development charge that is levied on a plot of land affects how much the developer is willing to pay for it.
Also, the Government revises the development charge every six months - in March and September - to bring them in line with recent transacted land prices. The revised development charge is seen as a reflection of how much land costs have gone up or down in the last six months.
So you want to use the term? Just say...
'If a developer tears down this small condo and builds a high-rise one in its place, it will probably have to pay a high development charge.'
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