Building Premiums Waived For Lease Extensions

Source : AsiaOne, Sep 01, 2008

The Government will with immediate effect waive the collection of building premium where lease extensions are granted.

A land premium and a building premium are currently charged when extending a State lease, based on the Common Law principle that both land and buildings would revert to the Landlord at the end of the lease.

In 1997, the Government decided to waive the building premium for short-term industrial and institutional leases. The change was made on the recommendation of the Committee on Singapores Competitiveness.

The Government has further reviewed the policy on the charging of a building premium when extending a State lease. The Government has decided to waive the building premium when a lease extension is granted because this will encourage lessees to continue to invest in the upkeep and improvement of the property.

Extension of State leases will be on a case-by-case basis where they are in line with planning intention and help to further specific economic and social objectives.