The following is a basic example scenario on how URA calculates development charge.
A&A Logistics Pte Ltd now wants to check how much development charge they will need to pay for the proposed extension.
Put simply, development charge is computed using this formula:
Development Ceiling is the value of the proposed development which received planning permission from URA, and is calculated using this formula:
As Provisional Permission was awarded on 12 August 2011, we look at the Development Charge Sector Map and Rates for March 2011 to identify the:
Hence the Development Ceiling is 10,200 sqm x S$840/sqm = S$8.57 million.
Development Baseline is the value of the approved development based on the approved use and intensity of the site. It also considers whether a development charge was previously paid, exempted, cancelled or not required.
It is important that you determine if development was approved under the 1993 Gross Floor Area (GFA) definition. The GFA of developments approved prior to 1989 will need to be re-computed under the 1993 GFA definition. A Qualified Person (registered architect or engineer) can re-compute the approved GFA under the 1993 definition if necessary.
The Development Baseline is calculated using this formula:
Hence the Development Baseline is 8,000 sqm x S$840/sqm = S$6.72 million.
For this example, Development Charge Exemption refers to the difference between the Safeguarded Historical Baseline (SHB) of the site and the Development Baseline:
To determine the SHB, we extract the historical land use and intensity of the site from the 1958, 1980 and 2003 Master Plans. In A&A Logistics Pte Ltd’s case:
The SHB Value is then calculated by multiplying the gross floor area (GFA) by the development charge rate based on the September 2003 table.
Next, we compare the higher value between the 1958 and 1980 Master Plans (i.e. 10,000 sqm), and the lower value between the 1958/1980 and 2003 Master Plans (i.e. 10,000 sqm) to determine the SHB. In this case, the SHB is the 1958/1980 Master Plan with a GFA of 10,000 sqm.
To calculate the SHB Value, the SHB of 10,000 sqm is multiplied by the development charge rate for March 2011 based on the material date Provisional Permission was granted (12 August 2011), i.e.:
10,000 x S$840/sqm = S$8.4 million.
Hence, the Development Charge Exemption is S$8.4 million – Development Baseline S$6.72 million = S$1.68 million.
The Development Charge that A&A Logistics Pte Ltd will need to pay for the proposed extension is:
Development Ceiling S$8.57 million – Development Baseline S$6.72 million – Development Charge Exemption S$1.68 million = S$170,000.