Businesses wanting to make slight modifications to their premises, like adding an outdoor dining area or change the use such as changing a part of a factory to a showroom, need only fork out a fraction of the full development charge.

A development charge is a tax landowners pay when altering the use of their properties or adding on space that enhances the value of the land.

Time-based levy benefits start-ups

With the temporary development levy, for example, a building owner who is thinking of setting up a 20 square metres outdoor refreshment area (ORA) in Orchard Road, has the option of applying for temporary permission and needs to pay a levy rate based on the period of permission instead of paying the full development charge.

If he intends to operate the ORA for an initial period of one year, he only pays 3.8% of the development charge, calculated at $61,000. This works out to be just $2,318. If the owner opts for two years, it would cost 7.5% and for three years, 10.9%, up to 30% for 10 years.

This time-based levy gives an extra boost to start-ups. It reduces entry barriers for new businesses and paves the way for new ideas to take off.

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